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
Correct Answer: Foreign direct investment
Solution : The correct answer is (d) Foreign direct investment
Foreign direct investment (FDI) is not considered a current account transaction. FDI involves a long-term investment in a foreign country, typically in the form of establishing or acquiring a business. It falls under the capital account of the balance of payments, which records financial transactions related to investments and capital flows.
On the other hand, the current account includes transactions related to the exchange of goods, services, income, and unilateral transfers.
Option 1: Foreign direct investment
Option 4: Income from foreign investments
Question : Which of the following is not a type of current account transaction?
Option 1: Import of goods
Option 2: Import of services
Option 3: Export of goods
Option 4: Export of capital
Question : Which of the following is not a type of capital account transaction?
Option 2: Portfolio investment
Option 3: international borrowing
Option 4: Import of goods and services
Question : Which of the following is not a type of financial account transaction?
Option 4: Export of goods and services
Question : Which of the following is an example of a capital account transaction in the Balance of Payments?
Option 2: Export of services
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