Which of the following will be included as a unilateral transfer in the balance of payments account of a country?
A) Transportation costs involved in traveling from a foreign country to the domestic country
B) A foreign worker in the domestic country sending money to his home country
C) Compensation earned by foreign workers in the domestic country
D) Royalties paid to residents working in a foreign country
E) Income paid on foreign-owned investments in the domestic country

Question

Quizplus · Accepted Answer

A unilateral transfer is a transfer of funds or economic resources between residents of a country and non-residents without the expectation of receiving anything in return. Sending money to a home country is an example of a unilateral transfer.

Answer: C, D, E
 Compensation earned by foreign workers in the domestic country, royalties paid to residents working in a foreign country, and income paid on foreign-owned investments in the domestic country are not unilateral transfers but rather components of the current account of the balance of payments.

Which of the Following Will Be Included as a Unilateral