Which of the following is part of the capital account of the balance of payments?
Answer Details
Net investment from abroad is part of the capital account of the balance of payments. The capital account is a record of a country's international transactions in assets. It includes transactions such as foreign investment in the domestic economy, domestic investment in foreign economies, and changes in foreign exchange reserves held by the central bank. Net investment from abroad is a measure of the difference between foreign investment in the domestic economy and domestic investment in foreign economies. It includes items such as foreign direct investment, portfolio investment, and other investments such as loans and currency reserves. The other options mentioned, such as import of machinery, insurance, and transportation costs, are typically categorized as part of the current account, which records transactions related to trade in goods and services.