Question : Which of the following is an example of a capital flow in the balance of payments?
Option 1: Export of goods and services
Option 2: Import of goods and services
Option 3: Foreign aid received
Option 4: Remittances from abroad
Correct Answer: Foreign aid received
Solution : The correct answer is c) Foreign aid received
Foreign aid received is an example of a capital flow in the balance of payments. The balance of payments is a record of all economic transactions between residents of one country and residents of other countries over a specific period. It is divided into two main components: the current account and the capital account.
The current account records the flow of goods, services, income, and transfers between countries.
Question : Which of the following is an example of a capital outflow in the balance of payments?
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 1: Import of goods
Option 2: Export of services
Option 3: Foreign investment in domestic companies
Option 4: Foreign aid received
Question : Which of the following is an example of a unilateral transfer in the Balance of Payments?
Option 1: Export of goods
Option 2: Import of services
Option 3: Remittances from overseas workers
Option 4: Foreign direct investment
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 an example of a capital account transaction in the Balance of Payments?
Option 3: Foreign investment in domestic real estate
Option 4: Repayment of foreign debt
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile