Question

From the following, which of the item would appear on the credit side of capital account of the balance of payment in India?

Options

• Education consultation from a firm in New York.

• Borrowings from rest of the world.

• Earthquake relief aid received from France.

• Imports of edible oils.

Answer 1

Borrowings from rest of the world.

Explanation:

Borrowings from abroad are included in the credit side of the Balance of Payments' capital account because they bring foreign exchange into the economy and are a credit item in the capital account.