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Question : Which of the following is not a component of the current account in the balance of payments?

 

Option 1: Goods and services

Option 2: Income from abroad

Option 3: Capital flows

Option 4: financial account


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Capital flows


Solution : The correct answer is (c) Capital flows

The current account in the balance of payments includes the components of goods and services, income from abroad, and current transfers. Capital flows, on the other hand, are recorded in the financial account of the balance of payments. Capital flows capture the movement of financial assets between countries, such as foreign direct investment, portfolio investment, and loans.

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