Read the passage carefully and answer the questions based on the passage:

Accounts in Balance of Payments

The current account is the record of trade in goods and services and transfer payments. Trade in goods includes exports and imports of goods. Trade in services includes factor income and non-factor income transactions. Transfer payments are the receipts which the residents of a country get for free, without having to provide any goods or services in return. They could be given by the government or by private citizens living abroad. Capital Account records all international transactions of assets. The capital account is in balance when capital inflows are equal to capital outflows. The essence of international payments is that just like an individual who spends more than her income must finance the difference by selling assets or by borrowing, a country that has a deficit in its current account must finance it by selling assets or by borrowing abroad. Thus, any current account deficit must be financed by a capital account surplus, that is, a net capital inflow. Apart from the current and capital accounts, there is a third element in the balance of payments called errors and omissions.

A current account deficit means that the nation is a borrower from other countries, which can also be represented as.

Receipts < Payments

The correct answer is Option (3) → Receipts < Payments

A current account deficit means that a country is spending more on imports and transfer payments than it is earning from exports and transfers received, i.e., payments exceed receipts. This implies Receipts < Payments, requiring the country to borrow or sell assets to finance the deficit.