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

Option 1: Balance of trade in goods and services

Option 2: Net income from abroad

Option 3: Net transfer payments

Option 4: Net capital inflows


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 13th Jan, 2024

Correct Answer: Net capital inflows


Solution : The correct answer is d) Net capital inflows

Net capital inflows are not a component of the current account. Net capital inflows refer to the difference between the inflow and outflow of financial capital, such as foreign investment in a country or loans received from abroad. This is a component of the capital account of the Balance of Payments (BoP), which tracks the financial transactions between residents and non-residents.

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