Question:
The table below shows some selected data from a Balance of Payments statement of a country… According to the information in the table, which statement is correct for the Balances of Payments situation of this country?
(1) There is a deficit of Rs. 180 billion on the trade balance.
(2) There is a surplus of Rs. 140 billion on the capital and financial account.
(3) There is a surplus of Rs. 100 billion on the current account.
(4) There is a deficit of Rs. 40 billion on the financial account.
(5) There is a surplus of Rs. 40 billion on the financial account.
Correct Answer:
(5)
Answer Explanation:
A surplus in the financial account indicates that the country has experienced a net inflow of foreign capital (borrowings, FDI, or portfolio investments exceeded outflows), acting as a net borrower from the rest of the world to finance a current account deficit.
Topic: Balance of Payments Year: 2021
Leave a Reply