Question

Arrange the following components of Balance of Payments in correct order from current account to capital account:
A. Foreign Investments
B. Export and Import of Goods
C. Banking Capital
D. Services
E. Transfer Payments

• A. B, D, E, A, C
• B. A, B, C, D, E
• C. D, B, E, C, A
• D. B, E, D, A, C

Hint:

Logic Tip: Current account records trade and services, while capital account records investments and financial flows.

Answer 1

The Correct Option is A

Step 1:
Balance of Payments (BoP) records all economic transactions between residents of a country and the rest of the world.

Step 2:
Current account includes:
• Export and import of goods
• Services
• Transfer payments Thus: \[ B \rightarrow D \rightarrow E \]

Step 3:
Capital account includes:
• Foreign investments
• Banking capital Thus: \[ A \rightarrow C \]

Step 4:
Correct sequence: \[ B,\; D,\; E,\; A,\; C \] Hence, the correct answer is: \[ \boxed{\text{(1) B, D, E, A, C}} \]