Consider the following statements 1 Current Account Deficit is a measurement of a countrys tra...........

Economic Affairs Balance of Payments

Consider the following statements.

1. Current Account Deficit is a measurement of a country's trade in which the value of goods and services it imports exceeds the value of goods and services it exports.

2. The current account also includes net income, such as interest and dividends, as well as transfers, such as foreign aid.

3. The current account is a calculation of a country's foreign transactions, and along with the capital account is a component of a country's balance of payment.

Which of the above statements are correct?

1 and 2 Only

1 and 3 Only

2 and 3 Only

All of the above

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Explanation:

All statements are correct.

The current account deficit is a measurement of a country's trade where the value of the goods and services it imports exceeds the value of the products it exports.
A current account deficit indicates that a country is importing more than it is exporting.
A big current account deficit implies borrowing from abroad to finance your economy. In excess, that can end in bankruptcy. Both government and private payments are included in the calculation of CAD.
In economics, a country's current account records the value of exports and imports of both goods and services and international transfers of capital. It is one of the two components of its balance of payments, the other being the capital account (also known as the financial account).
Current account measures the nation's earnings and spendings abroad and it consists of the balance of trade, net primary income or factor income (earnings on foreign investments minus payments made to foreign investors) and net unilateral transfers, that have taken place over a given period of time.