Which of the following are included in 'Invisibles' in international trade?
1. Services, transfers, and income flows between countries.
2. Net international earnings on factors of production like labor and capital.
3. Net sale of service products like banking and tourism.

Select the correct answer using code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Question

Which of the following are included in 'Invisibles' in international trade?
1. Services, transfers, and income flows between countries.
2. Net international earnings on factors of production like labor and capital.
3. Net sale of service products like banking and tourism.

Select the correct answer using code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

TutorArc · Accepted Answer

Invisibles in international trade refer to transactions that do not involve tangible goods but rather services, income flows, and transfers. Services, transfers, and income flows between countries are part of invisibles as they include services (like tourism, banking, and shipping), transfer payments, and income earned across borders. Net international earnings on factors of production, such as labor and capital, are included under factor income, which is also classified as part of invisibles.
Net sale of service products like shipping, banking, and tourism is included, as these fall under the "services" component of invisibles.

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