CBSE 2026 · Region 1 · Set 1 · Q14

Michel, an entrepreneur of Country Zeta, borrowed $\displaystyle 5 million from an overseas bank to expand his textile business. During the same financial year, the Government of Country Zeta secured a loan of $ $\displaystyle 30$ Billion from an International Financial Institution to manage the ongoing Balance of Payments.

Samuel, an Economics student categorised both of these transactions as 'autonomous transactions' in the BoP account of the country.

Do you agree with his classification ? Justify your answer with valid reasons.