The balance of payment of a country is a systematic record of

The Balance of Payments (BoP) is defined as a systematic record of all economic transactions between the residents of a country and the rest of the world over a specific period, typically a year [2]. These transactions are comprehensive and include the export and import of goods (visibles), services (invisibles), and capital movements such as assets and transfers [2]. While Option 2 refers only to the balance of trade in goods [2] and Option 4 refers only to the capital account [5], the BoP encompasses both. Option 3 is too narrow as it limits transactions to government entities, whereas BoP includes transactions by citizens, businesses, and the government [2]. Therefore, Option 1 best captures the standard definition of BoP as a systematic record of all import and export transactions (including goods, services, and capital) during a given period [4].

Sources

1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 6: Open Economy Macroeconomics > 6.1 THE BALANCE OF PAYMENTS > p. 86
2. [2] FUNDAMENTALS OF HUMAN GEOGRAPHY, CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > Balance of Trade > p. 73
3. [5] https://www.rba.gov.au/education/resources/explainers/the-balance-of-payments.html