Question

Assertion (A): Increased lending abroad are recorded on the debit side of the capital account. Reason (R): Lending affect the assets and liabilities of the economy and involves out flow of income.​

Answer 1

Answer:

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Explanation :-

• The lending to abroad results outflow of foreign currency that also increases the financial assets of a country. Those foreign transactions that affects the coutries financial assets comes in capital account

Answer 2

Answer:

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Explanation:

Ans – c)

Explanation:- External assistance comes under the borrowing raised from foreign countries and financial institutions.

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): Increased lending to abroad is recorded on the debit side of the capital account.

Reason (R): Lending affects the assets and liabilities of the economy and involves the outflow of income.

Alternatives: