Question : Which of the following is not an example of a capital outflow?
Option 1: Buying foreign bonds
Option 2: Investing in a foreign company
Option 3: Borrowing from a foreign bank
Option 4: Receiving foreign aid
Answer (1)
24th Jan, 2024
Correct Answer: Receiving foreign aid
Solution : The correct answer is (d) Receiving foreign aid
Receiving foreign aid is not an example of a capital outflow. Foreign aid represents the inflow of funds or resources from a foreign entity or government to support economic development, humanitarian assistance, or other purposes. It is considered a form of unilateral transfer and is recorded in the current account of the Balance of Payments (BoP).
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