McqMate
Chapters
1. |
Which of the following items is not included in the invisible items of balance of payments? |
A. | Shipping |
B. | Insurance |
C. | Export and import of goods |
D. | None of the above |
Answer» C. Export and import of goods |
2. |
In balance of payments account, all goods exported and imported are recorded in |
A. | Capital accounts |
B. | Merchandise account |
C. | Current account |
D. | Savings account |
Answer» C. Current account |
3. |
If a country has fundamental deficit in in the balance of payments, it should resort to |
A. | Exchange control |
B. | Devaluation of its currency |
C. | Inflation |
D. | Loans |
Answer» B. Devaluation of its currency |
4. |
Capital account includes |
A. | Invisible export |
B. | Long-term capital transaction |
C. | Invisible import |
D. | All of the above |
Answer» D. All of the above |
5. |
Balance of trade includes |
A. | Visible items |
B. | Invisible items |
C. | Both visible and invisible items |
D. | None of the above |
Answer» A. Visible items |
6. |
A country which gives loans and grants on a large scale to other countries has |
A. | A surplus in its BOP on capital account |
B. | A deficit in its BOP on capital account |
C. | A surplus in its BOP on current account |
D. | A deficit in its BOP on its current account |
Answer» B. A deficit in its BOP on capital account |
7. |
‘twin deficits’ refer to revenue deficit and |
A. | Capital deficit |
B. | Capital account BoP deficit |
C. | Current account BoP deficit |
D. | None of the above |
Answer» C. Current account BoP deficit |
8. |
Measurement of deficit or surplus in the balance of payments in in international transaction is in a given year is |
A. | Balance of payments |
B. | Balance of trade |
C. | Transfer payments to foreigners |
D. | None of the above |
Answer» A. Balance of payments |
9. |
Overvaluation of domestic currency makes |
A. | Foreign goods cheaper and exports dearer in foreign countries |
B. | Foreign goods dearer and exports cheaper in foreign countries |
C. | Domestic goods cheaper and foreign goods dearer |
D. | None of the above |
Answer» A. Foreign goods cheaper and exports dearer in foreign countries |
10. |
Devaluation encourage |
A. | Exports |
B. | Imports |
C. | Both exports and imports |
D. | None of the above |
Answer» A. Exports |
11. |
A systematic record of receipts and payments in international transactions of a country in a given year is called |
A. | Balance of trade |
B. | Balance of payments |
C. | Terms of trade |
D. | Capital account |
Answer» B. Balance of payments |
12. |
The most important items in the current account are |
A. | Foreign aid and pensions |
B. | Private remittances and gifts |
C. | Merchandise exports and imports |
D. | Transportation and insurance |
Answer» C. Merchandise exports and imports |
13. |
Lending to foreign countries represents |
A. | Capital inflows |
B. | Capital outflows |
C. | Services outflows |
D. | Services inflows |
Answer» B. Capital outflows |
14. |
Payment to foreign country is a |
A. | Credit transaction |
B. | Debit transaction |
C. | Internal transaction |
D. | External transaction |
Answer» B. Debit transaction |
15. |
The category that do not includes in the balance of payments account is/are |
A. | The current account |
B. | The capital account |
C. | The official settlements account |
D. | The savings account |
Answer» D. The savings account |
16. |
The expression (X-M) denotes |
A. | The balance of trade |
B. | The balance of payments |
C. | The domestic trade |
D. | None of the above |
Answer» A. The balance of trade |
17. |
If the difference between exports and imports is zero |
A. | Balance of trade balances |
B. | Balance of payments balances |
C. | Capital account equals current account |
D. | None of the above |
Answer» A. Balance of trade balances |
18. |
The current account BOP deficit will be beneficial for the economy if foreign borrowings are used to finance |
A. | Transportation |
B. | Shipping goods |
C. | Real investment |
D. | Small and medium enterprises |
Answer» C. Real investment |
19. |
In the equation Y=C+I+G+(X-M), G denotes |
A. | General expenditure |
B. | Government expenditure |
C. | Expenditure on gold |
D. | Expenditure on goods |
Answer» B. Government expenditure |
20. |
If export is less than import, there is a ….. in balance of trade. |
A. | Surplus |
B. | Deficit |
C. | Favourable |
D. | Balance |
Answer» B. Deficit |
21. |
In the equation B=Rf-Pf, Pf represents |
A. | Payments made by foreigners |
B. | Payments made to foreigners |
C. | Payments made to residents of a country |
D. | Payments made to exporters |
Answer» B. Payments made to foreigners |
22. |
The difference between exports and imports of a country is its |
A. | Balance of visible trade |
B. | Balance of invisible trade |
C. | Balance of payments |
D. | None of the above |
Answer» A. Balance of visible trade |
23. |
Under direct control measures, the government aims at limiting |
A. | The volume of imports |
B. | The volume of exports |
C. | Both imports and exports |
D. | None of the above |
Answer» A. The volume of imports |
24. |
Given the foreign exchange rate and prices in a country, an increase in the value of exports causes an increase in |
A. | Expenditures |
B. | Incomes |
C. | Investments |
D. | Employment |
Answer» B. Incomes |
25. |
Devaluation results in |
A. | Increase in domestic price of imports and decrease in foreign price of exports |
B. | Increase in foreign price of exports and decrease in domestic price of imports |
C. | Decrease in domestic price of imports and increase in foreign price of exports |
D. | None of the above |
Answer» A. Increase in domestic price of imports and decrease in foreign price of exports |
26. |
Undervaluation of currency encourages |
A. | Imports |
B. | Exports |
C. | Investments |
D. | None of the above |
Answer» B. Exports |
27. |
The equation Rf-Pf <0 denotes |
A. | Surplus in balance of payments |
B. | Deficit in balance of payments |
C. | Equilibrium in balance of payments |
D. | None of the above |
Answer» B. Deficit in balance of payments |
28. |
Imports in balance of payments account are shown as a |
A. | Negative item |
B. | Positive item |
C. | Invalid item |
D. | None of the above |
Answer» A. Negative item |
29. |
Which of the following account does not included in the Reserve account? |
A. | IMF |
B. | SDR |
C. | Reserve and monetary gold |
D. | Savings |
Answer» D. Savings |
30. |
Exchange rate depreciation reduces |
A. | The value of home currency in relation to foreign currency |
B. | The value of foreign currency in relation to a home currency |
C. | Both the values of home currency and foreign currency |
D. | None of the above |
Answer» A. The value of home currency in relation to foreign currency |
31. |
By restricting imports through the quota system, the deficit is |
A. | Reduce |
B. | Increase |
C. | Improve |
D. | None of the above |
Answer» A. Reduce |
32. |
A deficit in BOP occurs when |
A. | Credit>debit |
B. | Credit<debit |
C. | Credit=debit |
D. | None of the above |
Answer» B. Credit<debit |
33. |
Fundamental disequilibrium is |
A. | A short-term nature |
B. | A medium-term nature |
C. | A long-term nature |
D. | None of the above |
Answer» C. A long-term nature |
34. |
Deflation as a measure of correcting deficit in BOP tends to make |
A. | domestic goods relatively cheaper to foreign goods |
B. | domestic goods relatively dearer to foreign goods |
C. | foreign goods relatively cheaper to domestic goods |
D. | foreign goods relatively dearer to domestic goods |
Answer» A. domestic goods relatively cheaper to foreign goods |
35. |
in 1991, India devalued its currency by 18 per cent to |
A. | 19% |
B. | 20% |
C. | 21% |
D. | 22% |
Answer» B. 20% |
36. |
When government imposed tariffs, it results in improvement of |
A. | Balance of trade situation |
B. | Balance of payments situation |
C. | International transactions |
D. | Domestic transactions |
Answer» B. Balance of payments situation |
37. |
Which of the following is not a type of disequilibrium in BOP? |
A. | Temporary disequilibrium |
B. | Fundamental disequilibrium |
C. | Structural disequilibrium |
D. | Constant disequilibrium |
Answer» D. Constant disequilibrium |
38. |
Invisible exports and imports are the component of |
A. | Current account |
B. | Capital account |
C. | Savings account |
D. | None of the above |
Answer» A. Current account |
39. |
Exports that are estimated on free on board (f.o.b.) basis signifies that |
A. | the transportation costs, costs of insurance etc. are not included |
B. | the transportation costs, costs of insurance etc. are included |
C. | both (a) and (b |
D. | none of the above |
Answer» A. the transportation costs, costs of insurance etc. are not included |
40. |
Imports that are estimated on carriage, insurance and freight (c.i.f.) basis signifies that |
A. | the transportation costs, costs of insurance and freight get included. |
B. | the transportation costs, costs of insurance and freight get excluded. |
C. | Both (a) and (b |
D. | None of the above |
Answer» A. the transportation costs, costs of insurance and freight get included. |
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