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
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.
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
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 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 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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