Balance on current account has two components. These are:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → balance of trade and balance on invisibles
The current account covers goods and invisibles. So its balance has two parts: the balance of trade (goods) and the balance on invisibles (services, transfers and income flows).
NCERT (2026-27): “… Net Invisibles is the difference between the value of exports and value of imports of invisibles of a country in a given period of time. Invisibles include services, transfers and flows of income that take place between different countries. …” |
