Question : Which of the following is not an example of a current account transaction?
Option 1: Exporting goods and services
Option 2: Paying for foreign aid
Option 3: Receiving income from foreign investments
Option 4: Borrowing from a foreign bank
Answer (1)
7th Jan, 2024
Correct Answer: Borrowing from a foreign bank
Solution : The correct answer is d) Borrowing from a foreign bank
Borrowing from a foreign bank is not an example of a current account transaction. It is a financial transaction that falls under the capital account of the Balance of Payments (BoP). The capital account tracks the inflows and outflows of financial assets and liabilities between residents and non-residents.
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