Question : Which of the following is an example of a factor income in the current account?
Option 1: International transportation services
Option 2: Investment income
Option 3: Royalties and licensing fees
Option 4: Tourism and travel
Answer (1)
25th Jan, 2024
Correct Answer: Investment income
Solution : The correct answer is (b) Investment income
Investment income is an example of a factor income in the current account. Factor income represents the income earned from factors of production, such as labor and capital, in cross-border transactions. It includes income from investments abroad and income earned by foreign investors within a country.
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