Q. With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?
1.Balance of invisibles
2.Special Drawing Rights
3.Balance of trade
Select the correct answer using the codes given below;
Answer: C
Notes:
Loans and borrowing by private or public sectors, investments, and changes in the forex reserves are some of the examples of the components of the Capital Account. So, Special Drawing Rights are part of capital account.
Current Account shows export and import of visibles (also called merchandise or goods – represent trade balance) and invisibles (also called non-merchandise). Invisibles include services, transfers and income.
Source: The Hindu
