CBSE 2015 Class 12 Economics Outside Delhi Set-1

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Question : 9
Total: 18
Where is 'borrowings from abroad' recorded in the Balance of Payments Accounts? Give reasons.
Solution:  
Borrowings by a country from the foreign countries or from the international money market are recorded in the Capital Account of the BOP. As these borrowings results in inflow of foreign exchange into the country. Hence, they are recorded as positive items in the Capital Account of BOP.
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