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 Q2 of 15
Step-by-Step Solution
Step 1: Understand Capital Account transactions
The Capital Account records capital transfers and transactions involving non-produced, non-financial assets such as land and patents.Step 2: Analyze options
Purchase of land by a foreign company is a transaction involving a non-produced asset, thus recorded in the Capital Account. Remittances are current transfers in the Current Account. Exports of software services are trade in services, part of the Current Account. Portfolio investment inflows are financial account transactions.Final Answer:
Purchase of land by a foreign company → Option DQuick Check:
Purchase of land by a foreign company = correct ✅
Quick Trick: Land and patents fall under Capital Account.
Common Mistakes:
MISTAKES- Mixing financial investments with capital transfers.
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