Question

In the context of the Balance of Payments (BOP), which

Q: Answer-In the context of the Balance of Payments (BOP), which transaction represents an entry in the Financ...

Solution The Financial Account tracks cross-border changes in asset ownership. Credit Positive Entries represent a net inflow of funds or an increase in the countrys liabilities to foreigners. o FDI Inflow When a foreign entity e.g., a company buys a domestic asset factory, money flows into the domestic economy. This is an increase in domestic liability the factory is now owed to foreigners and is recorded as a credit in the Financial Account. Why others are incorrect A dividend income is a Current Account Credit Factor Income. B foreign aid is a Current Account Debit Transfer. D interest payment is a Current Account Debit Factor Income.

transaction represents an entry in the Financial Account (Capital Account) that would be recorded as a credit (a positive sign)?

A A foreign company purchases an existing domestic factory (Foreign Direct Investment - FDI).

B A domestic resident receives dividend income from a foreign stock investment.

C A domestic government makes an official foreign aid payment to a developing country.

D A domestic firm pays interest on a loan from a foreign bank.

Practice Next

More Research Questions

Select the most appropriate option to substitute the bold segment. If no substitution is required select 'No substitution'.

Each of the two broth...
In each of the questions given below, four words are given in bold. These four words may or may not be in their correct position. The sentence is then...
A. The idea of partitioning Palestine between the settler movement of Zionism, and later the state of Israel and the indigenous population of Palestine ...
In the following questions, a few words have been highlighted which may or may not require improvement. Interchange the highlighted words using the giv...
Days after manufacturing (A) a $6.5 billion acquisition, a business tycoon said his group has become (B) to double cement completing (C) capacity and pl...
In each of the following question, a sentence is given with four words marked as (A), (B), (C) and (D). These words may or maybe not placed at their co...
Direction : In each of the following questions a grammatically correct and meaningful sentence is given with four words given in bold in each. Which of...
These crises are straining(A) by several factors which are exacerbated(B) the demand(C) for water use for agricultural(D) , municipal, industrial and li...
If a curriculum is being presenting (A) for school students, who are of an impressionable (B) age, educationists can decide (C) on the manner of structu...
In each of the following question, a sentence is given with four words marked as (A), (B), (C) and (D). These words may or maybe not placed at their co...