Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Match List I with List II

 List I List II
A. Investments made abroad I. Credit side of the current account of BOP
B. Remittances to a relative staying abroad II. Debit side of the current account of BOP
C. Borrowing from IMF III. Debit side of the capital account of BOP
D. Export of cotton clothes IV. Credit side of the capital account of BOP

Choose the correct answer from the options given below:

Options:

A-III, B-II, C-IV, D-I

A-I, B-II, C-III, D-IV

A-IV, B-III, C-II, D-I

A-II, B-III, C-I, D-IV

Correct Answer:

A-III, B-II, C-IV, D-I

Explanation:

The correct answer is Option 1: A-III, B-II, C-IV, D-I

  • (A) Investments made abroad → (III) Debit side of capital account
    Outflow of capital from the country → debit entry

  • (B) Remittances to a relative staying abroad → (II) Debit side of current account. Transfer payment going out → debit in current account

  • (C) Borrowing from IMF → (IV) Credit side of capital account
    Inflow of funds → credit entry

  • (D) Export of cotton clothes → (I) Credit side of current account
    Export brings foreign exchange → credit entry