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Home Questions BAWTGBNTEA
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Current Account components of trade in services include:

(A) Gifts, Remittances
(B) Net Non-Factor Income
(C) Net Investment Income
(D) Grants

Choose the correct answer from the options given below :

Options:

(A), (B) and (C) Only

(B) and (C) Only

(A) and (D) Only

(B), (C) and (D) Only

Correct Answer:

(B) and (C) Only

Explanation:

The components of the Current Account related to trade in services include B and C:

  • (B) Net Non-Factor Income: This includes net earnings from services like tourism, transportation, and other services.
  • (C) Net Investment Income: This includes income from investments and financial assets.

Gifts and grants, represented by (A) and (D), are more related to transfer payments and are not considered components of trade in services in the Current Account.

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