Macro

Balance of Payments

Medium

Which of the following items can be included in Capital Account in BOP ?

(A) An Indian buys a UK Car company

(B) A Swedish citizen buys shares of Reliance company

(C) Export of Rajasthan's blue pottery to an Italian restaurant owner

(D) Apple I-phones gifted by an Indian company to its employees

Choose the correct answer from the options given below :

(B) and (C) Only

(A) and (D) Only

(A) and (B) Only

✅ Correct Option: 4

Capital Account records transactions in financial assets. An Indian buying a UK car company (A) is FDI outflow - capital account. A Swedish citizen buying Reliance shares (B) is FPI/FDI inflow - capital account. Export of blue pottery (C) is current account (trade in goods). Gifts by company to its employees (D) is not a cross-border transaction. Hence A and B.

2022: 19 July Shift 2

The likely impact of an appreciation of the US dollar, on imports of the South East Asian Countries from the US. would be :

2025: 30 May Shift 1

What does capital account of BOP record?

2025: 31 May Shift 1

Suppose, in a flexible exchange rate system, demand for foreign goods and services increases due to increased international travel by Indians.

Arrange the following statements in correct sequence.

(A) Exchange rate increases.

(B) Exports from India become more affordable for foreigners.

(D) The demand curve shifts towards the right.

Choose the correct answer from the options given below:

(D), (B), (C), (A)
(D), (C), (B), (A)
(D), (A), (B), (C)
(D), (B), (A), (C)

2025: 14 May Shift 1

Match List-I with List-II

List–I	List–II
(A) Devaluation	(I) Price of foreign currency in terms of domestic currency increase
(B) Revaluation	(II) Price of domestic currency in terms of foreign currency increases
(C) Depreciation	(III) Increase the exchange rate by the action of the Government
(D) Appreciation	(IV) Decreases the exchange rate by the action of the Government

Choose the correct answer from the options given below:

2025: 22 May Shift 2

When the income of domestic consumers increases, their spending will Increase and thus spending on imported goods is also likely to increase. This leads to ............... of domestic currency?

2026: 19 May Shift 2

Select the third element of BOP other than current and capital accounts.

Solution

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