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: Foreign loans, FDI, and Portfolio investment are capital account items, while remittances are current account. 📚 Other Information: ▪️ Capital account records movement of capital (FDI, loans, portfolio flows). ▪️ Current account records trade, invisibles, remittances. ▪️ Helps monitor external economic health.