Question : Which of the following transactions would result in a credit to the current account?
Option 1: Importing goods and services
Option 2: Exporting goods and services
Option 3: Borrowing from a foreign bank
Option 4: Making a foreign direct investment
Correct Answer: Exporting goods and services
Solution : The correct answer is b) Exporting goods and services
Exporting goods and services would result in a credit to the current account. When a country exports goods and services, it generates income from abroad, which is recorded as a credit in the current account of the Balance of Payments (BoP). This credit represents an inflow of funds into the country's economy.
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 4: Borrowing from a foreign bank
Option 1: Exporting goods and services
Option 3: Receiving income from a foreign investment
Option 4: Paying for foreign aid
Question : Which of the following is not a capital account transaction?
Option 1: Purchasing foreign stocks and bonds
Option 4: Buying goods and services from a foreign country
Question : Which of the following is not an example of a capital account transaction?
Option 1: Foreign direct investment
Option 2: Portfolio investment
Option 3: International borrowing
Option 4: Exporting goods and services
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
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