Which of the following constitute Capital Account?
- Foreign Loans
- Foreign Direct Investment
- Private Remittances
- Portfolio Investment
Select the correct answer using the codes given below.
[UPSC Civil Services Exam – 2013 Prelims]
(a) 1, 2 and 3
(b) 1, 2 and 4
(c) 2, 3 and 4
(d) 1, 3 and 4
Answer: (b)
Explanation:
- The capital account shows the net change in the physical or financial asset ownership for a country.
- It includes Foreign Direct Investment, Portfolio Investment, foreign loans, changes in the reserve account, etc.
- Hence statements 1,2 and 4 are correct.
- Private remittances come under the Current account and not the Capital account.
- Hence statement 3 is not correct.
- Hence option 2 is correct.