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JAMB Economics 1982 Question 13

Question 13

Balance of Payments and Exchange Rates

The difference between visible exports and invisible imports of a country, in money terms, is known as the

  1. A.balance of trade
  2. B.balance of payments
  3. C.terms of trade
  4. D.foreign reserves
  5. E.special drawing rights (SDR).
Show the answer and explanation

Answer: B (balance of payments)

Explanation

The balance of trade covers only visible goods; once invisible (service) items are included, the comparison belongs to the balance of payments.