Question : Which of the following is a current account transaction?
Option 1: Buying foreign currency
Option 2: Selling domestic currency
Option 3: Exporting goods and services
Option 4: Investing in foreign stocks
Correct Answer: Exporting goods and services
Solution : The correct answer is (c) Exporting goods and services
Exporting goods and services is a current account transaction. The current account of the Balance of Payments (BoP) records transactions related to trade in goods and services, income flows, and unilateral transfers.
Question : Which of the following is not an example of a current account transaction?
Option 1: Investing in foreign stocks
Option 2: Exporting goods and services
Option 3: Receiving income from foreign investments
Option 4: Paying for foreign aid
Question : Which of the following is an example of a capital account transaction?
Option 1: Importing goods and services from another country
Option 2: Exporting goods and services to another country
Option 3: Buying foreign stocks and bonds
Option 4: Receiving foreign aid
Question : Which of the following is an example of a unilateral transfer in the current account?
Option 1: Exporting goods and services
Option 2: Receiving foreign aid
Option 3: Investing in foreign stocks
Option 4: Borrowing from a foreign bank
Question : Which of the following is not a capital account transaction?
Option 1: Purchasing foreign stocks and bonds
Option 2: Making a foreign direct investment
Option 3: Borrowing from a foreign bank
Option 4: Buying goods and services from a foreign country
Option 2: Paying for foreign aid
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