This quiz works best with JavaScript enabled. Home > Economics > International > Bop > Balance Of Payments – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Any nation experiencing a current account deficit must also be running a capital and financial account surplus? A) True. B) False. C) This is true most of the time but can theoretically be false. D) None of above. Show Answer Correct Answer: A) True. 2. Balance of payments of a country has parts: A) 6. B) 3. C) 4. D) 2. Show Answer Correct Answer: B) 3. 3. Which of the following is a part of the financial account? A) Inheritance taxes. B) Transactions in patents. C) Reserve assets. D) None of the above. Show Answer Correct Answer: C) Reserve assets. 4. The acquisition of a UK football club by a rich foreign investor would count as A) A debit on the capital and financial account. B) A credit on the current account. C) A debit on the current account. D) A credit on the capital and financial account. Show Answer Correct Answer: D) A credit on the capital and financial account. 5. Payments of dividends by a foreign firms to Singaporeans. A) Debit entry in capital a/c. B) Credit entry in Capital a/c. C) Debit entry in Current a/c. D) Credit entry in Current a/c. Show Answer Correct Answer: D) Credit entry in Current a/c. 6. Which account indicating reserves of Forex in the Central Bank of Trinidad and Tobago A) Official reserve account. B) Twin Tower Account. C) Gold reserve account. D) Cash reserve account. Show Answer Correct Answer: A) Official reserve account. 7. Foreign exchange transactions which are independent of other transactions in BOP account are called: A) Accommodating transactions. B) Current transaction. C) Capital transactions. D) Autonomous transactions. Show Answer Correct Answer: D) Autonomous transactions. 8. Balance of Payments 'deficit' is the excess of: A) Autonomous payments over autonomous receipts. B) Accommodating payments over a accommodating receipts. C) Current account of payments over current account receipts. D) Capital account payments over capital account receipts. Show Answer Correct Answer: A) Autonomous payments over autonomous receipts. 9. Disequilibrium in Balance of payments leads to: A) Increase or decrease in official reserves with RBI. B) Increase or decrease in rate of commercial banks. C) Both A and B. D) None of these. Show Answer Correct Answer: A) Increase or decrease in official reserves with RBI. 10. This account records flows of money from the purchase and sale of real estate and financial assets between countries. A) Current account. B) Financial account. C) Official reserves. D) None of above. Show Answer Correct Answer: B) Financial account. 11. When a currency becomes more valuable in terms of other currencies, it ....., and when it becomes less valuable in terms of other currencies, it ..... A) Appreciates; Depreciates. B) Decreases; Increases. C) Depreciates; Appreciates. D) None of above. Show Answer Correct Answer: A) Appreciates; Depreciates. 12. Leroy Jenkins buys stock in a Japanese video game company. This transaction would be recorded as A) Current account. B) Financial/capital account. C) Official reserves. D) None of above. Show Answer Correct Answer: B) Financial/capital account. 13. The Dutch Disease problem arises when a country has such a strong commodity export that it ..... the value of that country's real exchange rate. A) Stagnates. B) Lowers. C) Deflates. D) Raises. Show Answer Correct Answer: D) Raises. 14. If there is a surplus in Balance of payments, this leads to: A) Increase in official reserves with Central Bank. B) Decrease in official reserves with Central Bank. C) Both A and B. D) None of these. Show Answer Correct Answer: A) Increase in official reserves with Central Bank. 15. Singapore decides to spend more in maintaining her diplomats in the Philippines. A) Credit entry in Current a/c (visible trade a/c. B) Debit entry in Current a/c (Invisible a/c). C) Debit entry in Current a/c (Visible trade a/c). D) Debit entry in Capital a/c. Show Answer Correct Answer: B) Debit entry in Current a/c (Invisible a/c). 16. Autonomous transactions are A) Profit motive. B) Above the line. C) Not balanceing in nature. D) All of above. Show Answer Correct Answer: D) All of above. 17. The current account shows A) International movement of goods and services. B) International movement of capital. C) Foreign exchange market. D) International movement of investments. Show Answer Correct Answer: A) International movement of goods and services. 18. What is not a part of the Current Account Balance A) Buying firms. B) Net Income Flows. C) Net Transfers. D) Balance of trade in goods and services. Show Answer Correct Answer: A) Buying firms. 19. Which of the following will be accounted for on the current account of an economy's balance of payments? A) Dividends from foreign investment. B) Sale of copyright. C) FDI. D) Short term flows of hot money. Show Answer Correct Answer: A) Dividends from foreign investment. 20. If the price of 1 US$ has fallen from Rs 56 to Rs 52, the Indian currency has: A) Depreciated. B) Appreciated. C) Devalued. D) None. Show Answer Correct Answer: B) Appreciated. 21. Bank of Baroda of India setting up an office in Trinidad and Tobago relates to which account? A) Current Account. B) Capital Account. C) Errors and Omission Section. D) Balance of Trade Section. Show Answer Correct Answer: B) Capital Account. 22. Japanese tourist visit Singapore and bought some Bee Chen Xiang BBQ. A) Credit entry in Current a/c (invisible trade a/c). B) Credit entry in Current a/c (visible trade a/c). C) Debit entry in Current a/c (visible trade a/c). D) Debit entry in Current account (invisible trade alc). Show Answer Correct Answer: A) Credit entry in Current a/c (invisible trade a/c). 23. The following items appear on the current account of the US balance payments, except for A) Dividends paid to foreign residents owning US shares. B) The sale of a hotel chain by an overseas conglomerate. C) A payment to farmers for wheat sold overseas. D) None of above. Show Answer Correct Answer: B) The sale of a hotel chain by an overseas conglomerate. 24. What would most likely cause Australia's balance of goods and services defict to become larger A) A decrease in Australia's inflation rate. B) An increase in interest rates of major trading partners. C) Improved transport infrastructure. D) An increase in Australia's interest rate. Show Answer Correct Answer: D) An increase in Australia's interest rate. 25. Capital account may be A) Private capital. B) Banking capital. C) Official capital. D) All of them. Show Answer Correct Answer: D) All of them. 26. A country's ..... are a summary of the country's transactions with other countries. A) Balance of Payments Accounts. B) Balance of Payments on the Current Account. C) Balance of Payments on Goods and Services. D) Balance of Payments on the Financial Account. Show Answer Correct Answer: A) Balance of Payments Accounts. 27. Which item is recorded in the financial account of a country's balance of payments? (Summer 2008) A) D a receipt of funds for long-term investment from abroad. B) A a receipt of a gift of cash from abroad. C) C a receipt of interest of abroad. D) B a receipt of a subsidy from abroad. Show Answer Correct Answer: A) D a receipt of funds for long-term investment from abroad. 28. In an open economy, when national income rises, other things being equal A) Total exports tend to fall. B) Total imports tend to fall. C) Total imports tend to rise. D) Imports and exports remain largely unchanged. Show Answer Correct Answer: C) Total imports tend to rise. 29. The ..... records international transactions. A) Balance of payments accounting system. B) International accounting standards. C) Gold standard procedure. D) ISO 9000 system. Show Answer Correct Answer: A) Balance of payments accounting system. 30. Final balance of payments of a country is: A) Always surplus. B) Fluctuates. C) Always deficit. D) Always balanced. Show Answer Correct Answer: D) Always balanced. ← PreviousNext →Related QuizzesInternational QuizzesEconomics QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 2Balance Of Payments Quiz 4Balance Of Payments Quiz 5Balance Of Payments Quiz 6Balance Of Payments Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books