Home › MCQs › SSC Micro Macro Economics P-I › Question #1691
Back to Questions
SSC Micro Macro Economics P-I QUESTION #1691
Question 1
In the balance of payments framework, the account that records all cross-border transactions involving financial instruments — such as foreign direct investment, portfolio investment, and other capital flows — is known as the:
  • Capital and financial account✔️
  • Current account
  • Official reserve account
  • None of these
Correct Answer Explanation
The Capital and Financial Account records all transactions involving financial assets and liabilities between residents of a country and the rest of the world. This includes foreign direct investment (FDI), portfolio investment (stocks, bonds), other investment (loans, deposits), and reserve assets. The Current Account records trade in goods, services, primary income, and secondary income (transfers).