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Question
Which of the following items will be recorded on the debit side of the balance of payments account of a country?
Options
Loan from USA
Exports of services
Unilateral transfer payments made to foreigner
Sale of assets to foreigners
MCQ
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Solution
Unilateral transfer payments made to foreigner
Explanation:
- Unilateral transfer payments made to foreigners (such as gifts, donations, or remittances sent abroad) involve an outflow of money from the country.
- Since it reduces the country’s foreign exchange reserves, it is recorded on the debit side of the balance of payments account.
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