Question
With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?
1. Balance of trade
2. Foreign assets
3. Balance of invisibles
4. Special Drawing Right
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3
(c) 1 and 3
(d) 1, 2 and 4
Answer:
C
To suggest corrections, send feedback using feedback button in top menu.
To suggest corrections, use feedback icon on top menu.
Explanation:
The Current Account in the Balance of Payments includes:
Balance of trade: It represents the difference between the value of a country's exports and imports of goods.
Balance of invisibles: It includes the net income from services (such as tourism, transportation, and financial services), net transfers (such as remittances), and other income (such as dividends and interest).
Foreign assets and Special Drawing Rights(SDR) are not a part of Balance of Payment.