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
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.
Question : Which of the following is an example of a non-factor service in the current account?
Option 1: international transportation services
Option 2: financial services
Option 3: Tourism and travel
Option 4: Royalties and licensing fees
Question : Which of the following is not an example of a capital account transaction?
Option 1: Foreign direct investment
Option 2: Portfolio investment
Option 3: International borrowing
Option 4: Exporting goods and services
Question : Which of the following is not a component of the current account?
Option 1: Trade in goods
Option 2: Trade in services
Option 3: Factor income
Option 4: Portfolio investment
Question : Which of the following is not included in the current account of the BoP?
Option 1: Imports and exports of goods and services
Option 2: Income from foreign investments
Option 3: international transfers and gifts
Option 4: Foreign direct investment
Question : Which of the following is not a component of the capital account?
Option 4: Current account balance
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