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JAMB Economics 2005 Question 46

Question 46

Balance of Payments and Exchange Rates

A long-term capital outflow is recorded in the balance of payment as a

  1. A.credit on the capital account
  2. B.credit on the current account
  3. C.debit on the current account
  4. D.debit on the capital account
Show the answer and explanation

Answer: D (debit on the capital account)

Explanation

Long-term investment flowing out of the country is a payment abroad on the capital account, so it is a debit there.