Question : The current account includes the balance of trade in goods, balance of trade in services, and balance of _______________transactions.
Option 1: capital
Option 2: financial
Option 3: investment
Option 4: current
Correct Answer: capital
Solution : The correct answer is (a) capital
The current account includes the balance of trade in goods, the balance of trade in services, and the balance of capital transactions. The balance of capital transactions represents the flow of financial capital between a country and the rest of the world, including items such as foreign direct investment, portfolio investment, and changes in reserve assets. It reflects the financial flows associated with the purchase or sale of assets, and it is an important component of the overall balance of payments.
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