Answer :


● If an Indian investor lends abroad, it will be recorded in the capital account of the balance of payment.

● This is because it creates new foreign exchange assets.

● It is recorded on the debit side because it leads to the outflow of foreign exchange.


Lending abroad increases the demand for foreign exchange.

● The supply of foreign exchange remains unchanged.

Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
view all courses

GEconomics - Board Papers

IEconomics - Board Papers

If nominal incomeEconomics - Board Papers

An economy is in Economics - Board Papers

Sale of petEconomics - Board Papers

FEconomics - Board Papers

An economy Economics - Board Papers