Question

Wages, profits, interest, and rent earned from or paid abroad are recorded in the current account under:

Options

• Goods (Visible Items)

• Factor Income (Factor Invisibles)

• Services (Non-factor Invisibles)

• Unilateral Transfers

Answer 1

Factor income covers wages, profits, interest, rent, etc., earned from or paid abroad, and is classified as Factor Invisibles. These represent returns to factors of production, which distinguishes them from non-factor services such as tourism and banking.