Question

Which one of the following is included in the item of Capital Account?

• A. Government transaction
• B. Private transaction
• C. Foreign Direct Investment
• D. All of these

Hint:

Capital Account = All transactions related to buying/selling assets (investments, loans, etc.).

Answer 1

The Correct Option is D

The Capital Account of the Balance of Payments records all international transactions that involve a change of ownership of assets. This includes:

Foreign Direct Investment (FDI): Long-term investment where a foreign entity gains significant influence over a domestic enterprise.
Government transactions: such as government loans to and from other countries.
Private transactions: such as individuals or firms buying foreign stocks or bonds.
All the options listed are components of the capital account.