12th Class Economics Financial Market / वित्तीय बाजार Question Bank

done MCQs - Balance of Payments Total Questions - 42

• question_answer1)
  Choose the correct statement from given below.
  A)
  Balance of trade records the exports and imports of invisible items. done clear
  B)
  A surplus in BoT can rectify the deficit in BoP. done clear
  C)
  Accommodating items are only recorded in capital account of BoP. done clear
  D)
  Import of machinery will be recorded in capital account of BoP. done clear
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• question_answer2)
  Choose the correct statement from given below.
  A)
  Balance of Trade is a component of capital account of Balance of Payments. done clear
  B)
  Floating exchange rate is used to stabilize price of foreign currency. done clear
  C)
  Increase in the supply of foreign exchange rate leads to fall in its price. done clear
  D)
  Rise in exchange rate leads to revaluation of currency. done clear
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• question_answer3)
  Write the correct sequence of options in Column II by matching them with options of Column I.

  	Column I		Column II
  A.	Visible items	(i)	Items consisting of capital receipts and capital payments
  B.	Invisible items	(ii)	All types of physical goods
  C.	Capital transfers	(iii)	All types of services

  Codes
  A)
  A-(i)      B-(ii)     C-(iii) done clear
  B)
  A-(ii)     B-(iii)     C-(i) done clear
  C)
  A-(iii)     B-(ii)     C-(i) done clear
  D)
  A-(i)      B-(iii)     C-(ii) done clear
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• question_answer4)
  Current account records all payments to rest of the world as ......... and all receipts from rest of the world as
  A)
  Credit, debit         done clear
  B)
  Debit, credit done clear
  C)
  Debit, debit  done clear
  D)
  Credit, credit done clear
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• question_answer5)
  Balance on invisible trade is equal to
  A)
  Export of goods -Import of goods done clear
  B)
  Export of services - Import of services done clear
  C)
  Import of goods - Export of goods done clear
  D)
  Import of services - Export of goods done clear
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• question_answer6)
  If value of visible exports is greater than the value of invisible imports, the balance relates to
  A)
  Current account BoP done clear
  B)
  Trade deficit done clear
  C)
  Capital account BoP done clear
  D)
  Can't be determined done clear
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• question_answer7)
  Balance of trade is a ......... concept as compared to balance of payments.
  A)
  narrower done clear
  B)
  broader done clear
  C)
  similar done clear
  D)
  None of the above done clear
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• question_answer8)
  If trade deficit is Rs. 1,500 crores and import of goods are Rs. 3,500 crores, value of export of goods will be Rs.2,000 crores.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true  done clear
  D)
  Can't be predicted done clear
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• question_answer9)
  Trade deficit refers to the situation where
  A)
  export of goods is more than import of goods. done clear
  B)
  export of goods is less than import of goods. done clear
  C)
  export of services is more than import of services. done clear
  D)
  export of services is less than import of services. done clear
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• question_answer10)
  Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I.

  	Column I		Column II
  A.	External assistance	(i)	Current account of BoP
  B.	Foreign direct Investment	(ii)	Credit item of capital account of BoP
  C.	Export and import of goods	(iii)	Debit item of capital account of BoP

  Codes
  A)
  A-(i)      B-(iii)     C-(ii) done clear
  B)
  A-(ii)     B-(iii)     C-(i) done clear
  C)
  A-(i)      B-(ii)     C-(iii) done clear
  D)
  A-(iii)     B-(i)      C-(ii) done clear
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• question_answer11)
  Uni-lateral transfers are included in
  A)
  current account BoP done clear
  B)
  capital account BoP done clear
  C)
  Both (a) and (b) done clear
  D)
  None of these done clear
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• question_answer12)
  If value of exports is Rs. 5,000 crores and import of Rs. 3,050 crores, balance of trade shows
  A)
  Surplus of Rs. 1,950 crores done clear
  B)
  Deficit of Rs. 1,950 crores done clear
  C)
  Surplus of Rs. 5,000 crores done clear
  D)
  Deficit of Rs. 3,050 crores done clear
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• question_answer13)
  Identify the correct pair of formula from the following column I and II.

  	Column I		Column II
  A.	Current account surplus	(i)	Receipts <Payments
  B.	Current account surplus	(ii)	Receipts > Payments
  C.	Balance current account	(iii)	Receipts \[\ne \] Payments
  D.	Current account deficit	(iv)	Receipts \[\le \] Payments

  Codes
  A)
  A - (i) done clear
  B)
  B - (iii) done clear
  C)
  C - (iii) done clear
  D)
  D - (iv) done clear
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• question_answer14)
  Which of the following is not a component of current account of BoP?
  A)
  Balance of trade done clear
  B)
  Balance of invisibles done clear
  C)
  Investment income done clear
  D)
  All of the above are the components of current account done clear
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• question_answer15)
  India outsources voice-based services and record keeping on a large scale. This will be considered as
  A)
  Export of visible done clear
  B)
  Export of merchandise done clear
  C)
  Export of invisibles done clear
  D)
  Both (b) and (c) done clear
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• question_answer16)
  If trade deficit shows a balance of Rs. (-) 1,500 crores and export of goods is Rs. 5,500 crores, value of import of goods will be
  A)
  Rs. 6,000 crores done clear
  B)
  Rs. 7,000 crores done clear
  C)
  Rs. 75,00 crores done clear
  D)
  Can't be determined done clear
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• question_answer17)
  Suppose India is exporting goods more as compared to importing goods, this will lead to ......... in balance of trade.
  A)
  surplus done clear
  B)
  deficit done clear
  C)
  Either (a) or (b) done clear
  D)
  None of the above done clear
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• question_answer18)
  A deficit in ......... can be covered by a surplus in .......... while the reverse cannot be done.
  A)
  BoP, BoT done clear
  B)
  BoT, BoP done clear
  C)
  current account, capital account done clear
  D)
  capital account, current account done clear
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• question_answer19)
  Increase in foreign exchange reserves are recorded in credit side of capital account.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true  done clear
  D)
  Can't be predicted done clear
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• question_answer20)
  Increase in domestic interest rate on investment leads to surplus in capital account.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't be predicted done clear
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• question_answer21)
  An Indian real estate company receives rent from Google in New York. This transaction would be recorded o ......... side of ......... account.
  A)
  credit, current done clear
  B)
  debit, capital done clear
  C)
  credit, capital done clear
  D)
  debit, current done clear
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• question_answer22)
  Which of the following is/are component (s) of capital account of BoP?
  A)
  Foreign direct investment done clear
  B)
  Borrowing from IMF by the government done clear
  C)
  Foreign exchange reserve done clear
  D)
  All of the above are components of BoP done clear
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• question_answer23)
  Choose the incorrect statement from given below.
  A)
  Repayment of loan taken from IMF will be recorded on debit side. done clear
  B)
  Surplus in BoP refers to a state where debit side exceeds credit side. done clear
  C)
  Increase in investment from rest of the world decreases the exchange rate. done clear
  D)
  Devaluation of current items improves trade balance of domestic country. done clear
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• question_answer24)
  For equilibrium in balance of payments, sum total of ......... account and ......... account should be zero.
  A)
  accommodating, autonomous done clear
  B)
  current, capital done clear
  C)
  current, autonomous done clear
  D)
  capital, accommodating done clear
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• question_answer25)
  Transactions which are undertaken to cover the dis-equilibrium (deficit or surplus) in balance of payments are called ......... .
  A)
  autonomous done clear
  B)
  accommodating done clear
  C)
  current account done clear
  D)
  None of the above done clear
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• question_answer26)
  Write the correct pair.

  	Column I		Column II
  A.	Export and import of goods	(i)	Accommodating item
  B.	Foreign exchange reserve	(ii)	Autonomous item
  C.	Balance of trade	(iii)	Difference between the export and import of visible items
  D.	Uni-lateral transfers	(iv)	Factor incomes in the form of interest, rent, etc

  Codes
  A)
  A-(i) done clear
  B)
  B-(ii) done clear
  C)
  C-(iii) done clear
  D)
  D-(iv) done clear
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• question_answer27)
  State of balance of payments always balances regardless of the types of transactions.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't be predicted done clear
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• question_answer28)
  Autonomous items are known as "below the line items."
  A)
  True  done clear
  B)
  False done clear
  C)
  Partially true  done clear
  D)
  Can't be predicted done clear
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• question_answer29)
  BoP always balance when accommodating items are reflected as a part of capital account of BoP.
  A)
  True   done clear
  B)
  False done clear
  C)
  Partially true  done clear
  D)
  Can't be predicted done clear
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• question_answer30)
  How is the state of balance of payments affects, when government is directly involved in foreign trade?
  A)
  Balance in BoP improves done clear
  B)
  Balance in BoP deteriorates done clear
  C)
  Depends upon trade balance done clear
  D)
  None of the above done clear
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• question_answer31)
  Balance of payments 'surplus refer to excess of
  A)
  Current account payment over current account receipts done clear
  B)
  Capital account payment over capital account receipts done clear
  C)
  Autonomous payments over autonomous receipts done clear
  D)
  Autonomous receipts over autonomous payments done clear
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• question_answer32)
  Currency depreciation leads to improvement on balance of trade.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't be predicted done clear
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• question_answer33)
  What will be the likely impact of increase in tariff on balance of trade keeping other things unchanged?
  A)
  Improve done clear
  B)
  Deteriorate done clear
  C)
  Remain constant done clear
  D)
  None of the above done clear
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• question_answer34)
  At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?
  A)
  Current account done clear
  B)
  Capital account done clear
  C)
  Both (a) and (b) done clear
  D)
  Neither (a) nor (b) done clear
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• question_answer35)
  For balance of payments to be in equilibrium, which of the following will happen?
  A)
  Surplus in current account equals to deficit in capital account done clear
  B)
  Surplus in capital account equals to deficit in current account done clear
  C)
  Either (a) or (b) done clear
  D)
  Neither (a) nor (b) done clear
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• question_answer36)
  Which of the following types of deficit is/are common in case of India?
  A)
  Trade deficit done clear
  B)
  Capital account deficit done clear
  C)
  Current account deficit done clear
  D)
  Both (a) and (c) done clear
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• question_answer37)
  During the outbreak of the second wave of Covid-19 in the country, India received medical equipments from many countries. On which account and which side it will be recorded?
  A)
  Capital account, credit side done clear
  B)
  Current account, credit side done clear
  C)
  Capital account, debit side done clear
  D)
  Current account, debit side done clear
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• question_answer38)
  Autonomous transactions/items of balance of payments are recorded in
  A)
  Current account done clear
  B)
  Capital account done clear
  C)
  Both (a) and (b) done clear
  D)
  Neither (a) nor (b) done clear
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• question_answer39)
  What will be the impact of Make in India Programme on the India's BoP?
  A)
  Improve done clear
  B)
  Deteriorate done clear
  C)
  No Change done clear
  D)
  Either (a) or (b) done clear
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• question_answer40)
  Favourable dis-equilibrium in BoP account leads to
  A)
  Increase in official reserve with RBI done clear
  B)
  Decrease in official reserve with RBI done clear
  C)
  No change in official reserve with RBI done clear
  D)
  Both (a) and (b) done clear
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• question_answer41)
  From the set of statements given in column I and Column II. Choose the correct pair of statements.

  	Column I		Column II
  A.	Export of software to France	(i)	Debit side of current account
  B.	Import of machinery from China	(ii)	Capital account of balance of payments
  C.	Remittances to relative staying abroad	(iii)	Debit side of current account of balance of payments
  D.	Investment by Apple phones firm in India	(iv)	Credit side of current account of balance of payments

  Codes
  A)
  A-(i)  done clear
  B)
  B-(ii) done clear
  C)
  C-(iii) done clear
  D)
  D-(iv) done clear
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• question_answer42)
  'Charity from Abroad' will be recoreded on ......... side of the balance of payments accounts.
  A)
  debit done clear
  B)
  credit done clear
  C)
  Either (a) or (b) done clear
  D)
  Not recorded done clear
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