Question : Which of the following is not a component of the financial account?
Option 1: Foreign direct investment
Option 2: Portfolio investment
Option 3: international borrowing
Option 4: Merchandise trade balance
Correct Answer: Merchandise trade balance
Solution : The correct answer is (d) Merchandise trade balance. The merchandise trade balance refers to the difference between the value of a country's exports and the value of its imports of goods. It is a component of the current account, not the capital account. Foreign direct investment, portfolio investment, and international borrowing are all types of capital account transactions.
Option 4: Current account transactions
Option 3: International borrowing
Question : Which of the following is not a type of capital flow?
Option 4: Merchandise trade
Question : Which of the following is not a component of the capital account?
Option 4: International transfers and gifts
Option 3: Official reserve assets
Option 4: Current account balance
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile