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All of the following are credit items in the balance of payments except: a private gifts...

All of the following are credit items in the balance of payments except: a private gifts to foreign residents b investment inflows c merchandise exports d payments for American services to foreigners

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Answer #1

Balance of payments represents the difference between the money flowing into the country during a particular period of time less the money outflow to the rest of the world.

Credit items in Balance of payments represents money entering the country.

So, Investment inflows, merchandise exports, payments for American services to foreigners are all credit items which brings the money into the country.

But Private gift to foreign residents is not a credit item.

So, Option 'A' is answer

Private gift to foreign residents

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