Answer: Option B
Answer: (b)
Balance of payments (BoP) accounts is an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country’s exports and imports of goods, services, financial capital, and financial transfers. The two principal parts of the BOP accounts are the current account and the capital account.
The current account shows the net amount a country is earning if it is in surplus, or spending if it is in deficit. It is the sum of the balance of trade (net earnings on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers.
Some of the components of the current account of BOP include investment income; borrowing entities in respect of their external commercial borrowing; secondary income account (transfer payments); primary income account (factor income such as from loans and investments), etc.