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 code given below.

Code :

Correct option is C

• The current account records a nation's transactions with the rest of the world – specially its net trade in goods and services, its net earnings on cross-border investment, and its net transfer payments – over a defined period of time, such as a year or a quarter. 

• When the payments made by a country exceed its receipts from trade of goods, services, transfer and net income, it is called Current Account Deficit (CAD). 

• CAD occurs when a country imports more goods, services and capital. Thus, A is true but R is false.

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