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Question : Which of the following is not a current account transaction?

Option 1: Foreign direct investment

Option 2: Export of goods and services

Option 3: Transfer payments

Option 4: Income from foreign investments


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Foreign direct investment


Solution : The correct answer is (a) Foreign direct investment

Foreign direct investment (FDI) is not a current account transaction. FDI is a capital account transaction, as it involves the acquisition or establishment of long-term assets, such as businesses or property, in a foreign country. It represents an investment in the real sector of the economy and is recorded in the capital account of the balance of payments.

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