Understanding the components and implications of Current Account Deficit (CAD) is fundamental to economics, particularly in international trade and balance of payments.
Given below are two statements, one labelled as Assertion (A) and the other as Reason (R): Assertion (A): When the payments made by a country exceeds its receipts from trade of goods, services, transfer and net income is called Current Account Deficit (CAD). Reason (R): Current Account Deficit (CAD) occurs when a country exports more goods, services and capital. Choose the correct answer from the codes given below: Codes : (a) Both A and R are true and R is the correct explanation of A. (b) Both A and R are true and R is not the correct explanation of A. (c) A is true but R is false (d) A is false but R is true
Asked in RO ARO 2020 · Topic: Current Account and Capital Account (Current Account Deficit (CAD): Causes, Implications, and Financing)
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Answer: C. A is true but R is false
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