Question

Study the following figure carefully and choose the correct alternative to fill in the blank:

 Balance of Payments Account 

• A. Investments
• B. Trade of Services
• C. External Borrowings
• D. External Assistance

Hint:

Remember, the Current Account of BoP includes trade in goods, trade in services, and unilateral transfers.

Answer 1

The Correct Option is B

The Balance of Payments (BoP) Current Account comprises trade in goods (merchandise), trade in services, and transfer payments. Option (B), "Trade of services," accurately completes the flowchart. Options (A) Investments, (C) external borrowings, and (D) external assistance are components of the Capital Account, not the Current Account.