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Question : Which of the following is not a factor that affects the capital account balance?

Option 1: Interest rates

Option 2: Political stability

Option 3: Domestic savings rates

Option 4: Exchange rates


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: Domestic savings rates


Solution : The correct answer is (c) Domestic savings rates.

Domestic savings rates primarily impact a country's domestic investment levels and the availability of funds for investment within the country. While domestic savings can indirectly influence the capital account balance by affecting the overall economic conditions and investment climate, it is not a direct factor that affects the capital account balance itself.

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