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Question : Which account in the Balance of Payments records international borrowing and lending?

Option 1: Current Account

Option 2: Capital Account

Option 3: Financial Account

Option 4: Reserve Account


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Financial Account


Solution : The correct answer is (c) Financial Account.

The financial account of the Balance of Payments records international borrowing and lending activities. It captures transactions related to financial assets and liabilities between residents and non-residents. This includes activities such as direct investment, portfolio investment, financial derivatives, other investment (such as loans and trade credits), and reserve assets.

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