Question : Which of the following components is a part of the Current Account in the Balance of Payments?
Option 1: Foreign Direct Investment
Option 2: Imports
Option 3: External debt
Option 4: Foreign exchange reserves
Answer (1)
10th Jan, 2024
Correct Answer: Imports
Solution : The correct answer is (b) Imports.
The Current Account includes various components that represent the flows of goods, services, income, and transfers between a country and the rest of the world. Imports specifically represent the value of goods and services that a country purchases from foreign countries. It is a part of the Current Account's balance, along with other components such as exports, income from investments, and unilateral transfers.
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