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Question : Which of the following is an example of a capital flow in the balance of payments?

Option 1: Export of goods and services
  

Option 2: Import of goods and services
  

Option 3: Foreign aid received

 

Option 4: Remittances from abroad


Team Careers360 5th Jan, 2024
Answer (1)
Team Careers360 14th Jan, 2024

Correct Answer: Foreign aid received


Solution : The correct answer is c) Foreign aid received

Foreign aid received is an example of a capital flow in the balance of payments. The balance of payments is a record of all economic transactions between residents of one country and residents of other countries over a specific period. It is divided into two main components: the current account and the capital account.

The current account records the flow of goods, services, income, and transfers between countries.

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