Question

The Balance on Invisibles covers which of the following?

Options

• Only exports and imports of physical goods

• Only tourism, banking, insurance, and transportation

• Goods, services, and the financial account

• Services, factor income, and unilateral transfers

Answer 1

The Balance on Invisibles covers services, factor income, and unilateral transfers — the three invisible components of the current account. Physical goods are excluded because they belong to the Balance of Trade (BOT).