Economic Awareness - Sectors of Indian Economy
Which of the following transactions would be recorded in the Financial Account of the Balance of Payments?
Which of the following transactions would be recorded in the Financial Account of the Balance of Payments?
medium Q5 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 loans.Step 2: Analyze options
Foreign portfolio investment in Indian stock markets is a financial asset transaction recorded in the Financial Account. Exports of textiles are trade in goods, part of the Current Account. Remittances are current transfers in the Current Account. Debt forgiveness is a capital transfer in the Capital Account.Final Answer:
Foreign portfolio investment in Indian stock markets → Option AQuick Check:
Foreign portfolio investment in Indian stock markets = correct ✅
Quick Trick: Portfolio investments belong to Financial Account.
Common Mistakes:
MISTAKES- Confusing portfolio investments with current transfers.
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