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Question : Which of the following transactions will be recorded in the capital account of the Balance of Payments?

Option 1: Import of goods

Option 2: Export of services

Option 3: Foreign investment in domestic companies

Option 4: Foreign aid received


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: Foreign investment in domestic companies


Solution : The correct answer is (c) Foreign investment in domestic companies

The capital account of the Balance of Payments records capital transfers and transactions involving the acquisition or disposal of non-financial assets. Foreign investment in domestic companies, such as foreign direct investment or portfolio investment, is a capital account transaction. It represents the movement of capital from one country to another and is recorded in the capital account.

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