Question : Which of the following is a capital account transaction?
Option 1: Exporting goods and services
Option 2: Making a foreign direct investment
Option 3: Receiving income from a foreign investment
Option 4: Paying for foreign aid
Answer (1)
26th Jan, 2024
Correct Answer: Making a foreign direct investment
Solution : The correct answer is (b) Making a foreign direct investment
A capital account transaction refers to the movement of financial capital between countries. It involves the acquisition or disposal of non-financial assets, such as foreign direct investment, financial derivatives, and changes in ownership of fixed assets.
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