WBCS.LIVE practice question

Which of the following constitutes a capital account in the Balance of Payments in India? 1. Foreign loans 2. Foreign Direct Investments 3. Remittances from abroad 4. Portfolio investment

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. 1, 2 and 3
  2. 1, 2 and 4
  3. 2, 3 and 4
  4. 1, 2, 3 and 4

Correct answer and explanation

Correct answer: 1, 2 and 4

Explanation: āœ… Correct Answer: B) 1, 2 and 4 šŸ“š Explanation: In a country's Balance of Payments, the Capital Account includes things like foreign loans (1), direct investments (2), and portfolio investments (4). These involve changes in assets or debt. Remittances sent home by people working abroad (3) are part of the Current Account. Option B correctly identifies the items that belong specifically to the capital account list.