Question : Which of the following is not an example of a current account transaction?
Option 1: Exporting goods and services
Option 2: Paying for foreign aid
Option 3: Receiving income from foreign investments
Option 4: Borrowing from a foreign bank
Correct Answer: Borrowing from a foreign bank
Solution : The correct answer is d) Borrowing from a foreign bank
Borrowing from a foreign bank is not an example of a current account transaction. It is a financial transaction that falls under the capital account of the Balance of Payments (BoP). The capital account tracks the inflows and outflows of financial assets and liabilities between residents and non-residents.
Option 1: Investing in foreign stocks
Option 2: Exporting goods and services
Option 4: Paying for foreign aid
Question : Which of the following is an example of a unilateral transfer in the current account?
Option 2: Receiving foreign aid
Option 3: Investing in foreign stocks
Question : Which of the following is a capital account transaction?
Option 1: Receiving foreign aid
Option 2: Making a foreign direct investment
Option 3: Exporting goods and services
Option 3: Receiving income from a foreign investment
Question : Which of the following is an example of a capital account transaction?
Option 1: Importing goods and services from another country
Option 2: Exporting goods and services to another country
Option 3: Buying foreign stocks and bonds
Option 4: Receiving foreign aid
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