Question : If there is a current account deficit in the balance of payment, then this deficit is settled by ___________________________________.

Option 1: Capital outflow from abroad

Option 2: Capital inflow from abroad

Option 3: Both A and B

Option 4: Neither A nor B.

Question

Question : If there is a current account deficit in the balance of payment, then this deficit is settled by ___________________________________.

Option 1: Capital outflow from abroad

Option 2: Capital inflow from abroad

Option 3: Both A and B

Option 4: Neither A nor B.

Team Careers360 · Accepted Answer

Correct Answer: Both A and B

Solution : If there is a current account deficit in the balance of payment, then this deficit is settled by capital inflows from abroad. Resources used to meet the deficit in the balance of payment includes foreign exchange reserves and borrowings from foreign monetary authorities.
Hence, Option C is correct.

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Question : If there is a current account deficit in the balance of payment, then this deficit is settled by ___________________________________. Option 1: Capital outflow from abroad Option 2: Capital inflow from abroad Option 3: Both A and B Option 4: Neither A nor B.

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Question : If there is a current account deficit in the balance of payment, then this deficit is settled by ___________________________________.

Option 1: Capital outflow from abroad

Option 2: Capital inflow from abroad

Option 3: Both A and B

Option 4: Neither A nor B.

Question : Capital account is used to

Option 1: Financial deficit in the current account

Option 2: Absorb surplus of current account

Option 3: Both A and B

Option 4: Neither A nor B.

Question : Investment from abroad is recorded on _ side of _ account.

Option 1: Credit, current

Option 2: Credit, capital

Option 3: Debit, current

Option 4: Debit, capital

Question : Transfer receipts includes ____________________.

Option 1: Current transfers

Option 2: Capital transfers

Option 3: Both A and B

Option 4: Neither A nor B

Question : Capital budget includes

Option 1: Capital receipts

Option 2: Capital expenditure

Option 3: Both A and B

Option 4: Neither A nor B

Question : Fill in the blanks-
Interest payment is a ________ expenditure.

Option 1: Revenue

Option 2: Capital

Option 3: Both A and B

Option 4: Neither A nor B.