Question : Which of the following is not a component of the financial account?
Option 1: Foreign direct investment
Option 2: Portfolio investment
Option 3: Official reserve assets
Option 4: Current account balance
Answer (1)
18th Jan, 2024
Correct Answer: Current account balance
Solution : The correct answer is (d) Current account balance
The current account balance is not a component of the financial account. The financial account measures the inflows and outflows of financial assets and liabilities, whereas the current account records the flows of goods, services, income, and current transfers between a country and the rest of the world.
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