Question
Which of the following transactions should be included
in the Balance of Payment?Solution
As we know, BoP includes all transaction among the residents of a country and the rest of the world. So in first two cases, money is crossing national borders. All remittances are recorded in BoP. But in third case the transaction is between two residents. Both the migrant labour and his family are in India. Money is not crossing border in this transaction. Thus it is not a part of Balance of Payment.
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