Gifts, remittances and grants in current account are the components of?
Options:
Transfer Payments.
Net Factor Income.
Trade in Goods.
Net Non-factor Income.
Correct Answer:
Transfer Payments.
Explanation:
The correct answer is Option (1) → Transfer Payments.
Gifts, remittances, and grants are one-sided transactions — meaning something of value is transferred without any quid pro quo (no good or service is exchanged in return).
Such transactions are recorded in the Current Account of the Balance of Payments (BoP) under the heading “Current Transfers” or “Transfer Payments.”
