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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


Team Careers360 21st Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Import of services


Solution : The correct answer is (b) Import of services.

The transaction that would be recorded as a debit entry in the Balance of Payments is Import of services.

In the Balance of Payments, a debit entry represents an outflow of foreign exchange or a decrease in a specific account.

Import of services transaction involves an outflow of foreign exchange as the country is paying for services received from abroad. Therefore, it would be recorded as a debit entry in the Balance of Payments.

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