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Answer

Correct Option is Neither 1 nor 2

International economic transactions are called autonomous when transactions are made independently of the state of the BoP (for instance due to profit motive). These items are called ‘above the line’ items in the BoP. Accommodating transactions (termed ‘below the line’ items), on the other hand, are determined by the net consequences of the autonomous items, that is, whether the BoP is in surplus or deficit. The official reserve transactions are seen as the accommodating item in the BoP (all others being autonomous).

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