The absorption approach to the balance of payments states that a country's trade balance improves only if national output increases by more than total absorption. Here, 'absorption' refers to:

The 'J-curve effect' in balance of payments adjustment suggests that after currency devaluation:

Consider the following pairs with reference to the Balance of Payments (BoP): I. Private remittances: Current Account II. Foreign Portfolio Investment (FPI): Capital Account III. Special Drawing Rights (SDRs): Current Account IV. External assistance in the nature of loans: Capital Account How many of the pairs given above are correctly matched?