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
Correct Answer: Portfolio investment
Solution : The correct answer is (d) Portfolio investment
Portfolio investment is not a component of the current account of the Balance of Payments (BoP). It is a financial account transaction that involves the purchase or sale of financial assets, such as stocks and bonds, between residents and non-residents.
Question : Which of the following is not a component of the financial account?
Option 1: Foreign direct investment
Option 2: Portfolio investment
Option 3: international borrowing
Option 4: Current account transactions
Option 3: International borrowing
Option 1: Merchandise trade balance
Option 2: Services trade balance
Option 3: Income balance
Option 4: Capital balance
Option 3: Official reserve assets
Option 4: Current account balance
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