Given below are two statements, one labeled as Assertion (A) and the other as Reason (R): Assertion (A): When the payments made by a country exceeds its receipts from the trade of goods, services, transfer, and net income are 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 codes given below: Correct Answer A is true but R is false The correct answer is A is true but R is false. R is false because the Current Account Deficit occurs if the value of the goods and services imported exceeds the value of those exported. Current Account deals with current, ongoing, short-term transactions like trade in goods, services (invisible), etc. Current Account = Trade gap + Net current transfers + Net income abroad Current Account Deficit and Fiscal Deficit are known as Twin Deficit. Additional Information Balance of Payment (BoP) Account: It is a systematic record of all economic transactions of a country with the residents of other countries in a financial year. There are two components of BoP: Current Account: There are 4 components of the Current Account: Goods Services (invisible) Income – investment income Current unilateral transfers – donations, gifts, grants, remittances ​​Capital Account: It also has broadly 4 components Foreign Direct Investment (FDI) Foreign Portfolio Investment (FPI) External Borrowings such as ECB Reserve Account with the Central Bank.​