Question : Which of the following transactions would result in a credit to the current account?
Option 1: Importing goods and services
Option 2: Exporting goods and services
Option 3: Borrowing from a foreign bank
Option 4: Making a foreign direct investment
Answer (1)
24th Jan, 2024
Correct Answer: Exporting goods and services
Solution : The correct answer is b) Exporting goods and services
Exporting goods and services would result in a credit to the current account. When a country exports goods and services, it generates income from abroad, which is recorded as a credit in the current account of the Balance of Payments (BoP). This credit represents an inflow of funds into the country's economy.
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