Match each transaction with how India's BoP records it.

Match each transaction with how India's…

Question 6

MediumOriginal question

Match each transaction with how India's BoP records it.

List I	List II
A. India exports rice to Iran	I. Credit in the capital account
B. India imports crude oil	II. Credit in the current account
C. A US firm builds a factory in India	III. Debit in the current account (services)
D. An Indian family pays for a holiday in Thailand	IV. Debit in the current account

A-II, B-I, C-III, D-IVCorrect answerYour answerA-I, B-II, C-IV, D-IIICorrect answerYour answerA-II, B-IV, C-I, D-IIICorrect answerYour answerA-III, B-IV, C-I, D-IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

Exports bring in foreign exchange (credit); imports and spending abroad send it out (debit).
Foreign investment coming in is a capital account credit.

Concept: Recording transactions
Typical timeTypical: 90 s
Your timeYours: —

The rule this testsThe BoP account

Practise this chapter →

Ten questions from Balance of Payments, at your own pace.

Practise this chapter →

Ten questions from Balance of Payments, at your own pace.

Question 6

Explanation