Answers:
Balance of payments (BoP) is an account statement
which holds the summation of all international transactions a country has had
with other nations. It reflects a country’s performance in trade, in attracting
foreign capital and the impact on the foreign exchange reserve of a country. As
per the balance of payments manual of the IMF, BoP comprises current account,
capital account, errors and omissions, and change in foreign exchange reserves.
The balance of payment on the current account is a
deficit or a surplus. If the payments are more than the receipts under the
current account, there will be deficit. If the receipts are more than the
payments, the current account will show a surplus.