Question : Which of the following is not an example of a capital inflow?
Option 1: Foreign direct investment
Option 2: Purchase of domestic assets by foreigners
Option 3: Repatriation of profits by domestic firms from foreign operations
Option 4: foreign aid received by a country
Correct Answer: Repatriation of profits by domestic firms from foreign operations
Solution : The correct answer is (c) Repatriation of profits by domestic firms from foreign operations
Repatriation of profits by domestic firms from foreign operations is not an example of a capital inflow. It refers to the transfer of profits earned by domestic firms from their foreign subsidiaries or operations back to the home country. This represents a capital outflow rather than an inflow.
Question : Which of the following is a capital account transaction?
Option 1: Buying goods and services from a foreign country
Option 2: Receiving foreign aid
Option 3: Making a foreign direct investment
Option 4: Earning income from a foreign investment
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 is an example of a capital account transaction?
Option 1: Importing goods from another country
Option 2: Exporting goods to another country
Option 3: Foreign direct investment (FDI)
Option 4: Receiving a foreign aid grant
Question : Which of the following is not a type of foreign direct investment?
Option 1: Acquisition of a foreign subsidiary
Option 2: Joint venture with a foreign firm
Option 3: Greenfield investment in a foreign country
Option 4: Purchase of foreign bonds
Question : Which of the following is a current account item in the Balance of Payments?
Option 2: Repatriation of profits by foreign companies
Option 3: Government borrowing from foreign sources
Option 4: Export of goods
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