Foreign Trade


The balance of payments of a country is a systematic record of

  1. goods exported from a country during a year
  2. economic transaction between the government of one country to another
  3. capital movement from one country to another
  4. all import and export transactions of a country during a given period of time, normally a year
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Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

  1. FII helps bring better management skills and technology, while FDI only brings in capital
  2. FII helps in increasing capital availability in general, while FDI only targets specific sectors
  3. FII is considered to be more stable than FDI
  4. FDI flows only into the secondary market, while FII targets primary market
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