Official Answer Key & Detailed Solution
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Correct Answer: Option (C) — 1 and 3
Concept & Option Breakdown
Standard Reference VerifiedThe Current Account of Balance of Payments comprises:
- Merchandise trade (Balance of Trade)
- Invisibles (Services, transfers, and income flows). Foreign assets (2) and Special Drawing Rights (4) are components of the Capital and Financial/Reserve Accounts of BoP.
SDRs and Foreign Assets represent capital/reserve assets, placing them strictly into the Capital/Financial Account, not the Current Account.
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