Among the followings which is not included in Capital Account Balance ?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Gifts and Donations
Gifts and donations are transfer payments: money received for free, with nothing given in return. Transfers are recorded in the current account of the BoP, along with trade in goods and services.
The capital account records international transactions in assets. Loans from abroad, banking capital and foreign investment are such capital account items.
NCERT (2026-27): Introductory Macroeconomics — Chapter 6: Open Economy Macroeconomics
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