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Open Economy Macroeconomics — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsOpen Economy Macroeconomics1 Mark
Question
Giving reason, state whether the following statement are true or false.
Borrowing by government from World Bank to finance the BOP deficit will be recorded in the capital account.
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Answer

True.Explanation:
Borrowing by the government is a accommodating transaction and it is recorded in the capital account only.

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