Question

A transaction that results in an increase in its account is known as a(n): A.) BOP...

A transaction that results in an increase in its account is known as a(n): A.) BOP DEBT B.)CAPTIAL FLOW C.) BOP CREDIT D.) ASSET ACCRETION

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Answer- The correct option is C ie., BOP Credit. BOP or better known as balance of payments refers to the transactions that occur between an entity and some other foreign country. If the exports are more than imports, income that are receivable from abroad are more than payables, any transfers from abroad are more than transfers to abroad etc. then BOP is in surplus and vice versa. Hence any transaction that increades the BOP surplus is called a BOP credit.

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