Question:
In which account of the Balance of Payments would an inflow of foreign direct investment be recorded?
(1) Primary income account
(2) Secondary income account
(3) Capital account
(4) Current account
(5) Financial account
Correct Answer:
(5)
Answer Explanation:
According to the IMF’s Balance of Payments Manual (BPM6), all transactions involving the transfer of ownership of financial assets and liabilities between residents and non-residents—including Foreign Direct Investment (FDI) and portfolio investments—are strictly recorded in the Financial Account.
Topic: Balance of Payments Year: 2020
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