Q. Which of the following do not form a part of the Balance of Payments (BoP)?

1. Foreign Direct Investment
2. External Lending or borrowing
3. Foreign Institutional Investment
4. Issuing of external bonds

Select the correct answer from the codes given below:
Answer: None of the above
Notes: All form a part of it. BoP - A statement that summarizes an economy's transactions with the rest of the world for a specified time period. The balance of payments, also known as balance of international payments, encompasses all transactions between a country's residents and its non-residents involving goods, services and income; financial claims on and liabilities to the rest of the world; and transfers such as gifts. The balance of payments classifies these transactions in two accounts - the current account and the capital account. The current account includes transactions in goods, services, investment income and current transfers, while the capital account mainly includes transactions in financial instruments. An economy's balance of payments transactions and international investment position (IIP) together constitute its set of international accounts. All the four options form a part of the capital account.

This question is part of UPSC Daily 20 MCQ Series Course on GKToday Android app.