ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A company located in India receives a loan from a company located abroad. How is this transaction recorded in India’s balance of payments account?
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Credit side of current account
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Debit side of current account
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Credit side of capital account
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Debit side of capital account
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Explanation:
Detailed explanation-1: -A company located in India receives a loan from a company located abroad. How is this transaction recorded in India’s BOP account? Capital flows transactions may be of form Deposits, Borrowings or Investment. Here the transaction is borrowings from abroad so it is recorded under capital account.
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