Final answer:
The major components of the current account balance in the balance of payments include the merchandise trade balance, services balance, income balance, and unilateral transfers.
Step-by-step explanation:
The major components of the current account in the balance of payments include:
- Merchandise trade balance: This represents the difference between a country's exports and imports of goods. If imports exceed exports, it results in a trade deficit.
- Services balance: This includes income from services like tourism, transportation, and financial services provided by a country to other nations.
- Income balance: This refers to income earned by residents of a country from investments made abroad and income earned by foreign residents from investments made in the country.
- Unilateral transfers: This includes one-sided payments made by a country to other nations, such as foreign aid, grants, and remittances.