Question : Which of the following is not a component of the current account in the Balance of Payments?
Option 1: Exports of goods
Option 2: Imports of goods
Option 3: Remittances from overseas workers
Option 4: Foreign direct investment
Correct Answer: Foreign direct investment
Solution : The correct answer is (d) Foreign direct investment.
Foreign direct investment (FDI) is not a component of the current account in the Balance of Payments. It is part of the capital and financial account. The current account records transactions related to the trade in goods, trade in services, income flows, and unilateral transfers.
Therefore, foreign direct investment (FDI) is not part of the current account but is recorded in the capital and financial account of the Balance of Payments.
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
Question : Which of the following is not a component of the financial account?
Option 1: Foreign direct investment
Option 2: Portfolio investment
Option 3: Official reserve assets
Option 4: Current account balance
Question : Which of the following is not a component of the capital account?
Option 3: international transfers and gifts
Question : Which of the following components is a part of the Current Account in the Balance of Payments?
Option 1: Foreign Direct Investment
Option 2: Imports
Option 3: External debt
Option 4: Foreign exchange reserves
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