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Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Current account records exports and imports of visible and invisible items only.
Statement 2: Balance of current account is the difference between sum of credit items and sum of debit items on current account.
Alternatives:
Both the statements are true.
Both the statements are false.
Statement 1 is true and Statement 2 is false.
Statement 2 is true and Statement 1 is false.
Option (4) is correct. Explanation: Current account is that account of BoP, which records exports and imports of visible and invisible items and unilateral transfers. Balance of current account is the difference between sum of credit items and sum of debit items entered in the current account.
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