Match each flow with its type.

Match each flow with its type. — CUET Economics practice

Question 24

MediumOriginal question

Match each flow with its type.

List I	List II
A. A Korean carmaker sets up a plant in Chennai	I. Banking capital (NRI deposits)
B. A foreign fund buys shares of Indian companies on the stock exchange	II. External commercial borrowing
C. An Indian company borrows dollars from a bank abroad	III. Portfolio investment
D. NRIs deposit money in Indian banks	IV. Foreign direct investment

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

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

FDI builds or controls a business; portfolio investment buys shares without control.
Commercial borrowing is a loan; NRI deposits are banking capital.

Concept: Kinds of capital flows
Typical timeTypical: 90 s
Your timeYours: —

The rule this testsThe capital 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 24

Explanation