Question : In the Balance of Payments, the capital account records transactions related to:
Option 1: Imports and exports of goods
Option 2: Income from foreign investments
Option 3: International transfers of funds
Option 4: International borrowing and lending
Answer (1)
24th Jan, 2024
Correct Answer: International borrowing and lending
Solution : The correct answer is (d) International borrowing and lending
The capital account in the Balance of Payments records transactions related to international borrowing and lending. It includes flows of financial assets, such as loans, bonds, and equity securities, between a country and the rest of the world. It represents the changes in a country's external financial assets and liabilities.
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