Question : Which of the following is not a capital account transaction?
Option 1: Purchasing foreign stocks and bonds
Option 2: Making a foreign direct investment
Option 3: Borrowing from a foreign bank
Option 4: Buying goods and services from a foreign country
Answer (1)
24th Jan, 2024
Correct Answer: Buying goods and services from a foreign country
Solution : The correct answer is d) Buying goods and services from a foreign country
Buying goods and services from a foreign country is not a capital account transaction. It is a transaction that falls under the current account of the Balance of Payments (BoP). The current account records the inflows and outflows of goods, services, income, and transfers between residents and non-residents.
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