The Capital Account records:

The Capital Account records:

• A. The balance of payments on goods and services only.
• B. The difference between(exports and imports) of goods.
• C. The current account excluding capital flows.
• D. The part of the balance of payments that records net changes in a country's international financial assets and liabilities.

Answer: (D)

Think of the Capital Account as tracking net changes in a country’s financial claims and obligations with the rest of the world. It records how much money flows in and out through ownership of financial assets and liabilities—borrowing from abroad, lending abroad, buying and selling foreign assets, and changes in reserve assets. That description—the net changes in a country’s international financial assets and liabilities—matches what the Capital Account is about, which is why it’s the best choice here. The other statements describe the trade in goods and services or current transactions, which belong to the current account rather than the capital account.

Think of the Capital Account as tracking net changes in a country’s financial claims and obligations with the rest of the world. It records how much money flows in and out through ownership of financial assets and liabilities—borrowing from abroad, lending abroad, buying and selling foreign assets, and changes in reserve assets. That description—the net changes in a country’s international financial assets and liabilities—matches what the Capital Account is about, which is why it’s the best choice here.

The other statements describe the trade in goods and services or current transactions, which belong to the current account rather than the capital account.