Question : Which account in the Balance of Payments represents the net change in a country's foreign assets and liabilities?
Option 1: Current Account
Option 2: Capital Account
Option 3: Financial Account
Option 4: Reserve Account
Answer (1)
24th Jan, 2024
Correct Answer: Financial Account
Solution : The correct answer is (c) Financial Account.
The Financial Account records financial transactions involving assets and liabilities between residents and non-residents. It captures changes in ownership of financial assets and liabilities, including direct investment, portfolio investment, financial derivatives, and other investment.
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