In the balance of payment account, the transfer payments are included in which one of the following?

Current account

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Service account

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Capital account

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Official reserves account

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Solution

The correct option is C Current account
Transfer payments in the balance of payment account are those payments that are made without any underlying exchange of goods/services. These are accounted for in the current account of the balance of payment and includes transfer payments such as:
(a) Gifts
(b) Foreign aid
(c) Pension
(d) Private remittances
(e) Charitable donations.

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