Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Capital Account of balance of payment includes :

(A) Export and Import of goods
(B) Receipt of loans from abroad
(C) Purchase of shares in foreign countries
(D) Current transfers from Abroad
(E) Repayment of International loans

Choose the correct answer from the options given below :

Options:

(A), (D), (C) Only

(D), (B), (A) Only

(B), (C), (E) Only

(E), (A), (D) Only

Correct Answer:

(B), (C), (E) Only

Explanation:

The Capital Account of the balance of payments includes items related to financial transactions and capital transfers between residents and non-residents. Among the options provided:

(B) Receipt of loans from abroad - Included: This is a capital inflow.

(C) Purchase of shares in foreign countries - Included: This involves cross-border financial transactions.

(E) Repayment of international loans - Included: This is a capital outflow.

Therefore, the correct options related to the Capital Account are (B), (C), and (E).

The other answer choices are incorrect because they are transactions that are recorded in the Current Account of the balance of payments. The Current Account records transactions that involve the exchange of goods and services between residents of one country and residents of another country.