Q.

What is the difference between the balance of trade and the balance of payments?

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a

Balance of trade includes only goods and services, while balance of payments includes all economic transactions between a country and the rest of the world

b

Balance of payments includes both exports and imports of goods and services, while balance of trade includes only imports

c

Balance of payments includes only goods and services, while balance of trade includes all economic transactions between a country and the rest of the world

d

Balance of trade includes both exports and imports of goods and services, while balance of payments includes only exports

answer is A.

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Detailed Solution

The correct answer is A. Balance of trade refers to the difference between the value of a country's exports and imports of goods and services, while the balance of payments refers to all economic transactions between a country and the rest of the world, including trade, investment, and transfers.

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