Question : Which of the following transactions will be recorded in the capital account of the Balance of Payments?
Option 1: Import of goods
Option 2: Export of services
Option 3: Foreign investment in domestic companies
Option 4: Foreign aid received
Correct Answer: Foreign investment in domestic companies
Solution : The correct answer is (c) Foreign investment in domestic companies
The capital account of the Balance of Payments records capital transfers and transactions involving the acquisition or disposal of non-financial assets. Foreign investment in domestic companies, such as foreign direct investment or portfolio investment, is a capital account transaction. It represents the movement of capital from one country to another and is recorded in the capital account.
Question : Which of the following transactions would be recorded as a debit entry in the Balance of Payments?
Option 1: Export of goods
Option 2: Import of services
Option 3: Foreign investment in domestic assets
Option 4: Receipt of foreign aid
Question : Which of the following is an example of a capital account transaction in the Balance of Payments?
Option 3: Foreign investment in domestic real estate
Option 4: Repayment of foreign debt
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 not a component of the capital account in the balance of payments?
Option 1: Foreign direct investment
Option 2: Loans to foreign countries
Option 3: Purchases of foreign currency by domestic residents
Option 4: Export and import of goods and services
Question : Which of the following is not a capital account component in the balance of payments?
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