Question

Q. The Current account of Balance of Payment (BOP) includes:

Select the correct answer using the code given below:

• A. 1 and 2 only
• B. 1 and 3 only
• C. 1, 2 and 3 only
• D. 1, 3 and 4 only

Answer 1

The correct option is A 1 and 2 only

Explanation:

The current account is used to monitor the inflow and outflow of goods and services between countries. This account covers all the receipts and payments made with respect to raw materials and manufactured goods.

It also includes:

• Receipts from engineering,
• Receipts from tourism, transportation, business services, stocks, and royalties from patents and copyrights, and
• Unilateral transfers.

Note: Loans & borrowings and foreign exchange reserves are included in the capital account of the Balance of Payment (BOP).