gs1medium

Which of the following constitute Capital Account?

  1. 1.Foreign Loans
  2. 2.Foreign Direct Investment
  3. 3.Private Remittances
  4. 4.Portfolio Investment

Select the correct answer using the code given below:

  1. A.1, 2 and 3 only
  2. B.1, 2 and 4 only
  3. C.2, 3 and 4 only
  4. D.1, 3 and 4 only
▶ Answer & Explanation

Correct answer: B. 1, 2 and 4 only

The capital account of a country's balance of payments records all financial transactions between a country and the rest of the world that involve the transfer of ownership of financial assets and liabilities. Foreign loans, foreign direct investment (FDI), and portfolio investment are all components that affect a nation's foreign financial assets and liabilities. Private remittances, on the other hand, are typically considered part of the current account as they represent transfers of income or goods and services.

Source: UPSC gs1 2013

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