Which of the following can be included in the current account of the balance of payments ? (i) Purchase…
The Current Account of the Balance of Payments records (i) merchandise imports (purchase of goods from abroad), (ii) trade in services (sale of services abroad), and (iii)…
Choose your answer
Which of the following can be included in the current account of the balance of payments ?
(i) Purchase of goods from abroad
(ii) Sale of services abroad
(iii) Workers’ remittances from aboard
(iv) Sale of copyright to foreigners
(v) Direct investment in equity capital
Answer and explanation
Correct answer A
The Current Account of the Balance of Payments records (i) merchandise imports (purchase of goods from abroad), (ii) trade in services (sale of services abroad), and (iii) unilateral current transfers such as workers' remittances from abroad, whereas acquisition/disposal of non-produced intangible assets like copyrights (iv) and foreign direct equity investment (v) belong to the Capital/Financial Account. Thus, '(i), (ii) and (iii)' is correct.
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UGC NET Commerce