Question : Which account in the Balance of Payments records international borrowing and lending?
Option 1: Current Account
Option 2: Capital Account
Option 3: Financial Account
Option 4: Reserve Account
Answer (1)
21st Jan, 2024
Correct Answer: Financial Account
Solution :
The correct answer is (c) Financial Account.
The financial account of the Balance of Payments records international borrowing and lending activities. It captures transactions related to financial assets and liabilities between residents and non-residents. This includes activities such as direct investment, portfolio investment, financial derivatives, other investment (such as loans and trade credits), and reserve assets.
Comments (0)
