Economic Awareness - Sectors of Indian Economy
Which of the following transactions is recorded in the Financial Account of the Balance of Payments?
Which of the following transactions is recorded in the Financial Account of the Balance of Payments?
easy Q12 of 15
Step-by-Step Solution
Step 1: Understand Financial Account transactions
The Financial Account records transactions involving financial assets and liabilities such as foreign direct investment, portfolio investment, and reserve assets.Step 2: Analyze the options
Portfolio investment by foreign investors is a financial asset transaction, so it belongs to the Financial Account. Debt forgiveness is a Capital Account transaction. Remittances and export of software services are Current Account transactions.Final Answer:
Portfolio investment by foreign investors → Option DQuick Check:
Financial Account = investments and financial assets ✅
Quick Trick: Financial Account includes FDI and portfolio investments.
Common Mistakes:
MISTAKES- Mixing capital transfers with financial investments.
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