Components of the Current Account in Balance of Payments

Steps:

• Recall current account includes trade in goods/services, primary income (e.g., investment earnings), and secondary income (e.g., transfers).
• Note "trade services" specifically refers to the services balance within goods and services trade.
• Evaluate options: services involve intangible exports like tourism, not goods or income flows.
• Match: tourism revenue fits services, as it's payment for services provided to foreigners.

Why C is correct:

• Income from foreign tourists is classified as travel services under the services component of the current account, per IMF balance of payments manual.

Why the others are wrong:

• A: Development aid is secondary income (current transfers), not services trade.
• B: Export revenue from primary commodities is goods trade, not services.
• D: Income from overseas investments is primary income (investment income), not services.

Final answer: C