ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following will be accounted for on the current account of an economy’s balance of payments?
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Dividends from foreign investment
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Sale of copyright
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FDI
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Short term flows of hot money
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Explanation:
Detailed explanation-1: -Transactions in goods and services are recorded in the current account of the balance of payments.
Detailed explanation-2: -The current account of the balance of payment comprises exports and imports of goods, services and unilateral transfers like remittances, gifts, donations, etc. The net value of all these constitutes the balance of the current account.
Detailed explanation-3: -The four major components of a current account are goods, services, income, and current transfers.
Detailed explanation-4: -A country’s Balance of Payments (BOP) consists of current account, capital account and official settlement account. The Foreign Direct Investment (FDI) inflows are reported under the capital account of BOP.
There is 1 question to complete.