Which of the following constitute Capital Account? 1. Foreign Loans 2. Foreign Direct Investment 3. Private Remittances 4. Portfolio Investment Select the correct answer using the codes given below.

QUESTION

Medium

Economy

Prelims 2013

Which of the following constitute Capital Account?

Select the correct answer using the codes given below.

Select an option to attempt

Explanation

The capital account and the current account are the two main components of a nation's balance of payment.

Whereas the current account reflects a nation's net income, the capital account reflects the net change in ownership of assets.

Thus, it is clear that private remittances are part of the current account .
On the other hand, foreign Loans, FII (Foreign Institutional Investor) and FDI (Foreign Direct Investment) are part of the capital account .
Remittances fall under Current Account .

Trusted by 2L aspirants