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    Question

    The net Balance of Payment of country is:

    A Always zero Correct Answer Incorrect Answer
    B Always deficit Correct Answer Incorrect Answer
    C Always surplus Correct Answer Incorrect Answer
    D It keeps fluctuating Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The Balance of Payment is always balanced. The net of Current Account and Capital Account is, if in negative, then RBI releases its forex reserve to make it zero. If it is positive, then RBI absorbs the excess to make it zero. Thus the net Balance of Payment always remains zero.

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