ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Remittances from workers in Wizbaland sent back to family members in Wakanda
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Factor income earned by citizens of Wakanda on real assets held in the nation of Housego
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Imports to Wakanda from Hamsterville
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The nation of Maxistan buys a bond from Wakanda
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Exports from Wakanda to the nation of Theopolis
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Detailed explanation-1: -The correct answer is : C. US Capital inflow and outflow. Reason: US capital inflow and outflow is a part of capital account of balace of payments.
Detailed explanation-2: -Note: Changes in the foreign exchange reserves are not included in the current account of the BoP.
Detailed explanation-3: -There are three components to the current account – the ‘trade balance’, ‘primary income balance’ and ‘secondary income balance’. In economic analysis or commentary, most attention is usually given to the trade balance, which records the difference between the value of our exports and imports of goods and services.
Detailed explanation-4: -The four major components of a current account are goods, services, income, and current transfers.