Economic Awareness - Sectors of Indian Economy
Which of the following transactions is recorded in the Capital Account of the Balance of Payments?
Which of the following transactions is recorded in the Capital Account of the Balance of Payments?
easy Q12 of 15
Step-by-Step Solution
Step 1: Understand the types of transactions
The question asks which transaction is recorded in the Capital Account of the Balance of Payments.Step 2: Analyze each option
Remittances are current transfers recorded in the Current Account. Foreign portfolio investment inflows are recorded in the Financial Account. Debt forgiveness is a capital transfer recorded in the Capital Account. Exports of software services are part of trade in services, recorded in the Current Account.Final Answer:
Debt forgiveness by a foreign country → Option CQuick Check:
Capital Account = capital transfers like debt forgiveness ✅
Quick Trick: Capital Account includes capital transfers, not trade.
Common Mistakes:
MISTAKES- Mixing current transfers with capital transfers.
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