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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 :

Solution

Correct Option: 2

Trade in services (invisible trade) includes both factor income (Net Investment Income) and non-factor income (Net Non-Factor Income like banking, shipping). Gifts, Remittances, and Grants are transfer payments, which form a separate component of the current account, not trade in services. Hence B and C.

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