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What is the primary purpose of the Capital Account in the Balance of Payments?
  • a)
    To record imports and exports of goods.
  • b)
    To track capital expenditures made by the government.
  • c)
    To keep a record of financial inflows and outflows related to foreign investments.
  • d)
    To manage government revenue and expenditure.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
What is the primary purpose of the Capital Account in the Balance of P...
The primary purpose of the Capital Account in the Balance of Payments is to keep a record of financial inflows and outflows related to foreign investments. This includes transactions like foreign direct investment, external commercial borrowing, government loans to foreign governments, and other capital transfers. The Capital Account provides insights into a country's international financial relationships and the movement of capital across borders.
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What is the primary purpose of the Capital Account in the Balance of Payments?a)To record imports and exports of goods.b)To track capital expenditures made by the government.c)To keep a record of financial inflows and outflows related to foreign investments.d)To manage government revenue and expenditure.Correct answer is option 'C'. Can you explain this answer?
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