While the balance of trade is the difference between the monetary value of exports and imports, the balance of payments
A)
counts only goods.
B)
counts only services.
C)
counts goods and the financial transactions between countries.
D)
counts goods, services, and financial transactions between countries.
Balance of payment is the sum total of all economics transaction at the end of the trading period usually a year
(D)........
D) counts goods, services, and financial transactions between countries.
The correct answer is D) counts goods, services, and financial transactions between countries.
The balance of payments is a record of all economic transactions between a country and the rest of the world over a specific time period. It includes the exchange of goods, services, and financial transactions such as transfers and investments.
To determine the answer to this question, we need to understand what the balance of payments includes. The balance of payments consists of two main components: the current account and the capital account.
The current account deals with the exchange of goods and services. It includes the export and import of physical goods (goods account) as well as the export and import of intangible items like services (services account).
On the other hand, the capital account includes financial transactions between countries. This includes investments, loans, transfers, and other financial flows.
Therefore, the balance of payments not only considers the exchange of goods and services but also the financial transactions between countries. This is why the correct answer is D) counts goods, services, and financial transactions between countries.