Which of the following pairs is/are not correctly matched?

1. Global Value Chains (GVC) : International Product Sharing

2.  World Integrated Trade Solutions. : Database on GVC related Trade

3. Current Account  Deficit (CAD) : Foreign Direct Investment

Select the answer using the code given below:

The correct answer is Option 2.

Key Points

• Global Value Chains (GVC): International Product Sharing is correctly matched. GVC refers to the sequence of activities involved in the design, production, and distribution of goods across multiple countries.
• World Integrated Trade Solutions (WITS): Database on GVC-related Trade is not accurately matched. WITS is a trade analysis tool developed by the World Bank, but it is not specifically designed for GVC-related trade data.
• Current Account Deficit (CAD): Foreign Direct Investment is incorrectly matched. CAD refers to the shortfall between a country's exports and imports of goods, services, and investments, and is unrelated to Foreign Direct Investment (FDI).
• The correct answer is based on analyzing the mismatched pair in the given question.

Additional Information

• Global Value Chains (GVC):
  • GVC represents the international organization of production, where different stages of production are carried out in different countries.
  • It is a critical driver of globalization and international trade.
  • Countries participate in GVCs to gain access to advanced technologies and global markets.
• World Integrated Trade Solutions (WITS):
  • WITS is a trade analysis tool developed by the World Bank.
  • It provides comprehensive data on tariffs, trade flows, and non-tariff measures.
  • Users include policymakers, economists, and researchers for analyzing trade policies and their impacts.
• Current Account Deficit (CAD):
  • CAD occurs when a country's total imports of goods, services, and investments exceed its total exports.
  • A persistent CAD can lead to a depletion of foreign exchange reserves.
  • It is an important indicator of a country's macroeconomic stability.
• Foreign Direct Investment (FDI):
  • FDI refers to investments made by a company or individual in one country into business interests in another country.
  • FDI is a major source of economic growth and development in emerging markets.
  • It differs from portfolio investment as it involves direct control or significant influence over the business operations.