Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Which of the following options will be recorded in the "Capital account" of balance of payment account?

  1. Purchase of shares of Reliance industries by Apple.
  2. Borrowing from World Bank.
  3. Repayment of loan by Indian government taken from Belgium government.
  4. Purchase of land in Europe.
Options:

1 and 2

1, 2 and 3

3 and 4

1, 2, 3 and 4

Correct Answer:

1, 2, 3 and 4

Explanation:

Capital account records all the transaction which affects the assets and liabilities of the countries. Whereas, current account records all the transactions of good and services and which are recurring in nature. As, all the options lead to change in the assets and liabilities status of the government. Thus, all will be recorded under the "Capital account" head.