gs1medium

With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?

  1. 1.Balance of Trade
  2. 2.Foreign Assets
  3. 3.Balance of Invisibles
  4. 4.Special Drawing Rights

Select the correct answer using the code given below:

  1. A.1, 2 and 3 only
  2. B.1, 2 and 4 only
  3. C.2, 3 and 4 only
  4. D.1, 3 and 4 only
▶ Answer & Explanation

Correct answer: D. 1, 3 and 4 only

The Current Account of the Balance of Payments records receipts and payments relating to trade in goods and services, income, and transfers. The Balance of Trade (merchandise) and the Balance of Invisibles (services, income, and transfers) are key components. Special Drawing Rights (SDRs) are international reserve assets created by the IMF, which are part of the Capital and Financial Account, not the Current Account.

Source: UPSC gs1 2014

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