Question : Which of the following is an example of a capital account transaction in the Balance of Payments?
Option 1: Import of goods
Option 2: Export of services
Option 3: Foreign investment in domestic real estate
Option 4: Repayment of foreign debt
Correct Answer: Foreign investment in domestic real estate
Solution : The correct answer is (c) Foreign investment in domestic real estate.
A capital account transaction in the Balance of Payments refers to activities that involve changes in a country's foreign assets and liabilities. It includes capital transfers and the acquisition and disposal of non-produced, non-financial assets.
Foreign investment in domestic real estate: This is an example of a capital account transaction. When foreign entities invest in domestic real estate, it involves a change in a country's non-produced, non-financial assets and is recorded in the capital account.
Question : Which of the following is an example of an invisible item in the Balance of Payments?
Option 1: Import of machinery
Question : Which of the following is an example of a capital outflow in the balance of payments?
Option 1: Export of goods and services
Option 2: Import of goods and services
Option 3: foreign investment in domestic assets
Option 4: Domestic investment in foreign assets
Question : Which of the following transactions will be recorded in the capital account of the Balance of Payments?
Option 3: Foreign investment in domestic companies
Option 4: Foreign aid received
Question : Which of the following is an example of a capital account item in the Balance of Payments?
Option 1: Import of raw materials
Option 2: Export of software services
Option 3: Foreign investment in domestic stocks
Option 4: Remittances by overseas workers
Question : Which of the following is not a current account transaction?
Option 1: Import of goods and services
Option 2: Export of goods and services
Option 3: Transfer payments
Option 4: Foreign direct investment
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