{"id":90827,"date":"2025-06-01T10:38:29","date_gmt":"2025-06-01T10:38:29","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=90827"},"modified":"2025-06-01T10:38:29","modified_gmt":"2025-06-01T10:38:29","slug":"an-indian-businessperson-buys-shares-in-a-british-car-company-this-tr","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/an-indian-businessperson-buys-shares-in-a-british-car-company-this-tr\/","title":{"rendered":"An Indian businessperson buys shares in a British car company. This tr"},"content":{"rendered":"

An Indian businessperson buys shares in a British car company. This transaction will be reflected in :<\/p>\n

[amp_mcq option1=”Balance of Trade, but not in Balance of Payments.” option2=”Balance of Payments, but not in Balance of Trade.” option3=”both Balance of Payments and Balance of Trade.” option4=”neither Balance of Payments nor Balance of Trade.” correct=”option2″]<\/p>\n

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This question was previously asked in<\/div>\n
UPSC CAPF – 2023<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe Balance of Payments (BOP) is a record of all economic transactions between residents of a country and the rest of the world over a specific period. It comprises the Current Account (trade in goods and services, income, transfers) and the Capital\/Financial Account (investments, loans, reserves). The Balance of Trade (BOT) is typically a sub-part of the Current Account, recording only the exports and imports of *goods*. Buying shares in a foreign company is a financial transaction, specifically a portfolio investment abroad, which is recorded in the Capital\/Financial Account of the BOP. It does not involve the trade of goods. Therefore, the transaction will be reflected in the Balance of Payments but not in the Balance of Trade.
\n<\/section>\n
\n– Balance of Payments (BOP) records all international economic transactions, including financial ones.
\n– Balance of Trade (BOT) primarily records international trade in goods.
\n– Buying foreign shares is a financial investment, recorded in the Capital\/Financial Account of the BOP.
\n<\/section>\n
\nThe BOP must always balance in accounting terms, meaning the sum of the Current Account, Capital Account, and Financial Account, plus net errors and omissions, is zero. A transaction like buying foreign shares represents an outflow of capital from the investor’s country and is recorded as a debit item in the Financial Account.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

An Indian businessperson buys shares in a British car company. This transaction will be reflected in : [amp_mcq option1=”Balance of Trade, but not in Balance of Payments.” option2=”Balance of Payments, but not in Balance of Trade.” option3=”both Balance of Payments and Balance of Trade.” option4=”neither Balance of Payments nor Balance of Trade.” correct=”option2″] This question … <\/p>\n

Detailed SolutionAn Indian businessperson buys shares in a British car company. This tr<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1105,1226],"class_list":["post-90827","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1105","tag-external-sector-of-economy","no-featured-image-padding"],"yoast_head":"\nAn Indian businessperson buys shares in a British car company. This tr<\/title>\n<meta name=\"description\" content=\"The Balance of Payments (BOP) is a record of all economic transactions between residents of a country and the rest of the world over a specific period. It comprises the Current Account (trade in goods and services, income, transfers) and the Capital\/Financial Account (investments, loans, reserves). The Balance of Trade (BOT) is typically a sub-part of the Current Account, recording only the exports and imports of *goods*. Buying shares in a foreign company is a financial transaction, specifically a portfolio investment abroad, which is recorded in the Capital\/Financial Account of the BOP. It does not involve the trade of goods. Therefore, the transaction will be reflected in the Balance of Payments but not in the Balance of Trade. - Balance of Payments (BOP) records all international economic transactions, including financial ones. - Balance of Trade (BOT) primarily records international trade in goods. - Buying foreign shares is a financial investment, recorded in the Capital\/Financial Account of the BOP.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/an-indian-businessperson-buys-shares-in-a-british-car-company-this-tr\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"An Indian businessperson buys shares in a British car company. This tr\" \/>\n<meta property=\"og:description\" content=\"The Balance of Payments (BOP) is a record of all economic transactions between residents of a country and the rest of the world over a specific period. It comprises the Current Account (trade in goods and services, income, transfers) and the Capital\/Financial Account (investments, loans, reserves). The Balance of Trade (BOT) is typically a sub-part of the Current Account, recording only the exports and imports of *goods*. Buying shares in a foreign company is a financial transaction, specifically a portfolio investment abroad, which is recorded in the Capital\/Financial Account of the BOP. It does not involve the trade of goods. Therefore, the transaction will be reflected in the Balance of Payments but not in the Balance of Trade. - Balance of Payments (BOP) records all international economic transactions, including financial ones. - Balance of Trade (BOT) primarily records international trade in goods. - Buying foreign shares is a financial investment, recorded in the Capital\/Financial Account of the BOP.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/an-indian-businessperson-buys-shares-in-a-british-car-company-this-tr\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:38:29+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"An Indian businessperson buys shares in a British car company. 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Therefore, the transaction will be reflected in the Balance of Payments but not in the Balance of Trade. - Balance of Payments (BOP) records all international economic transactions, including financial ones. - Balance of Trade (BOT) primarily records international trade in goods. - Buying foreign shares is a financial investment, recorded in the Capital\/Financial Account of the BOP.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/an-indian-businessperson-buys-shares-in-a-british-car-company-this-tr\/","og_locale":"en_US","og_type":"article","og_title":"An Indian businessperson buys shares in a British car company. This tr","og_description":"The Balance of Payments (BOP) is a record of all economic transactions between residents of a country and the rest of the world over a specific period. 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