Which of the following transactions will improve the capital account balance but worsen the Net International Investment Position (NIIP)?

CA Foundation · Business Economics · MTP · May 2026
Which of the following transactions will improve the capital account balance but worsen the Net International Investment Position (NIIP)?
(A) A. Increase in exports of software services
(B) B. Foreign Direct Investment inflow
(C) C. Repayment of external commercial borrowing
(D) D. Rise in remittances from abroad

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Foreign Direct Investment inflow

Topics: International Trade

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