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

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With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?
1. Balance of trade
2. Foreign assets
3. Balance of invisibles
4. Special Drawing Rights
Select the correct answer using the code given below:

(a)

1 only

(b)

2 and 3 only

(c)

1 and 3 only

(d)

1, 2 and 4 only

Answer:

(c)

Core Books/NCERT

Explanation

Statement 1 is correct: Balance of trade (exports − imports of goods) is a major component of the current account. Statement 2 is incorrect: Foreign assets are part of the capital account/financial account of BoP, not the current account. Statement 3 is correct: Balance of invisibles (services, remittances, income, transfers) is part of the current account. Statement 4 is incorrect: Special Drawing Rights (SDRs) fall under capital account/official reserves, not current account.