(i)Foreign investment (ii) Long-term lending (iii) Short-term lending (iv)Foreign exchange (v) Short-term borrowing. Which combination of the above include capital account in international trade?
- i, iii, and iv
- ii, iii and iv
- ii and v
-
i and ii
The correct answer is: D
Explanation
Foreign investment (i): This involves capital allocation by individuals or entities in foreign assets, such as businesses and securities. It is crucial for economic growth and stability in the host country.
Long-term lending (ii): This refers to loans with maturities over one year, used for financing large projects and infrastructure. It plays a key role in the capital account by providing essential funding for significant investments.