BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Deficit on Trade Account .
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Deficit on Invisibles Account.
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Deficit on Trade and Invisibles Account.
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Deficit onTrade Invisibles and Capital Account.
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Detailed explanation-1: -A nation has a current account deficit when it sends more money to sources abroad than it receives from sources abroad. A trade deficit is normally the largest component of a current account deficit. It’s a situation when a country imports more than it exports in a given period of time.
Detailed explanation-2: -A deficit then means that the country is importing more goods and services than it is exporting-although the current account also includes net income (such as interest and dividends) and transfers from abroad (such as foreign aid), which are usually a small fraction of the total.
Detailed explanation-3: -Current account contains the receipts and payments relating to all the transactions of visible items, invisible items and unilateral transfers.
Detailed explanation-4: -Invisible account of the balance of payments is a subcategory of the current account. The invisible account includes three sub categories – services, transfers and income. Here, the invisible account registers receipts and payments from exports and imports of services, transfers and income.