This quiz works best with JavaScript enabled. Home > Economics > International > Bop > Balance Of Payments – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When receipts of foreign exchange are more than payments of foreign exchange, BOP is: A) Balanced. B) Surplus. C) Deficit. D) None of these. Show Answer Correct Answer: B) Surplus. 2. USA citizens send money to disaster relief fund in Sri Lanka. This will get recorded in the USA BoP as a, A) Reserves. B) Financial ac outflow. C) Transfers outflows. D) Investment income outflow. Show Answer Correct Answer: C) Transfers outflows. 3. A USA apparel company pays a German advertising firm to develop their next commercial. This will get recorded in the USA BoP ac as, A) Visible balance inflow. B) Invisible balance inflow. C) Invisible balance outflow. D) Visible balance outflow. Show Answer Correct Answer: C) Invisible balance outflow. 4. The Malaysian government buys a new Boeing 787 from the U.S. This transaction is recorded as A) A debit on the income account. B) A credit on the net goods account. C) A goods account debit. D) A capital account credit. Show Answer Correct Answer: C) A goods account debit. 5. What is a devaluation in the value of a currency? A) A fall in its external value. B) A fall in its internal value. C) A rise in its external value. D) A rise in its internal value. Show Answer Correct Answer: B) A fall in its internal value. 6. Causes of BOP imbalance relates to A) Autonomous items. B) Accommodating items. C) Both a and b. D) Neither a nor b. Show Answer Correct Answer: A) Autonomous items. 7. If BOT is showing the deficit of rs 200crs and value of exports is 700crs, then the value of imports will be: A) Rs 700crs. B) Rs900crs. C) Rs200crs. D) Rs 500crs. Show Answer Correct Answer: B) Rs900crs. 8. Balance of payments is in this equilibrium when A) Capital account balance + capital account balance is not equal to zero. B) Capital account balance + capital account is not positive number. C) Capital account balance + capital account balance is not negative number. D) All of these. Show Answer Correct Answer: D) All of these. 9. A country with a fixed exchange rate has a current account surplus on its balance of payments.What is most likely to reduce this surplus?(Summer 2017) A) C higher tariffs. B) A higher interest rates. C) B higher investment spending. D) D higher taxes. Show Answer Correct Answer: C) B higher investment spending. 10. A payment for which nothing of economic value is received in return is called A) A transfer payment. B) A waste of money. C) A Dead Weight Loss. D) None of above. Show Answer Correct Answer: A) A transfer payment. 11. Singapore tourists buy a few LV handbags from Europe. A) Debit entry in current a/c (invisible trade a/c). B) Debit entry in current account (visible trade a/c). C) Credit entry in current account (visible trade a/c). D) Credit entry in current a/c (invisible trade a/c). Show Answer Correct Answer: A) Debit entry in current a/c (invisible trade a/c). 12. US entrepreneur receives earnings from a factory they own in Portugal. This will be recorded in the USA BoP as, A) Financial ac inflow. B) Transfers inflow. C) Investment income inflow. D) Invisible balance inflow. Show Answer Correct Answer: C) Investment income inflow. 13. The stock of physical and financial assets held by a country around the world is known as the A) Foreign Direct Investment. B) International Investment Position. C) Investment income. D) Portfolio Investment Flows. Show Answer Correct Answer: B) International Investment Position. 14. Foreign exchange transactions which are dependent of other foreign exchangetransactions are called: A) Autonomous transactions. B) Accommodating transactions. C) Current account transactions. D) Capital account transactions. Show Answer Correct Answer: B) Accommodating transactions. 15. Which account indicating reserves of Forex with RBI A) Cash reserve account. B) Gold reserve account. C) Official reserve account. D) None of these. Show Answer Correct Answer: C) Official reserve account. 16. Current account of BOP records transactions is related to A) Exchange of goods. B) Exchange of service. C) Unilateral transactions. D) All of above. Show Answer Correct Answer: D) All of above. 17. Which of the following structural factors would reduce a trade deficit? A) An appreciation of the exchange rate. B) An increase in the company tax rate. C) An increase in multifactor productivity growth. D) Additional regualtion of the business sector. Show Answer Correct Answer: C) An increase in multifactor productivity growth. 18. When India takes a loan from IMF, it is a.. A) Transfer payment. B) Transfer receipt. C) Capital receipt. D) Capital payment. Show Answer Correct Answer: C) Capital receipt. 19. The major source of Australia's CAD is the ..... section. A) Secondary income. B) Services. C) Primary income. D) Goods. Show Answer Correct Answer: C) Primary income. 20. The emergence of a surplus in the financial account would tend to A) Reduce the net income deficit in the current account. B) Increase the net income deficit in the current account. C) Have no effect on the net income outcome. D) None of above. Show Answer Correct Answer: A) Reduce the net income deficit in the current account. 21. How is the purchase of imported cars recorded in the UK's BoP? A) As a goods credit in the current account. B) As a goods credit in the capital account. C) As a goods debit in the current account. D) As a goods credit in the income account. Show Answer Correct Answer: C) As a goods debit in the current account. 22. Which one of the following would help offset a current account deficit? A) Private firms borrowing from overseas. B) The RBA buying Australian dollars on the foreign currency markets. C) A fall in interest rates in Australia. D) All of the above. Show Answer Correct Answer: A) Private firms borrowing from overseas. 23. In case of currency appreciation, the domestic currency becomes ..... . A) Less valuable. B) More valuable. C) Rise. D) Fall. Show Answer Correct Answer: B) More valuable. 24. Autonomous items are related to those transactions which A) Are determined by motive of profit. B) For welfare purpose. C) For foreign investment. D) None of these. Show Answer Correct Answer: A) Are determined by motive of profit. 25. Which one of the following items are not the transactions of balance of trade A) Import of steel. B) Export of jute. C) Banking services providedin other countries. D) Import of food items. Show Answer Correct Answer: C) Banking services providedin other countries. 26. When will a country's balance of payments current account deficit be reduced?(Oct/Nov 2011) A) A when it raises its rate of income tax. B) D when it removes export subsidies. C) C when it revalues its currency. D) B when it reduces tariffs on its imports. Show Answer Correct Answer: A) A when it raises its rate of income tax. 27. Balance of trade is a part of: A) Official reserve account. B) Current account BoP. C) Capital Account BoP. D) None of these. Show Answer Correct Answer: B) Current account BoP. 28. Leroy Jenkins buys stock in a Japanese video game company. This transaction would be recorded on the US balance of payments as A) Current account. B) Financial/capital account. C) Official reserves. D) None of above. Show Answer Correct Answer: B) Financial/capital account. 29. The purchase by foreigners of shares in Australian businesses is know as A) Portfolio investment. B) Direct investment. C) Debt finance. D) The institutional loans. Show Answer Correct Answer: D) The institutional loans. 30. Japanese tourist visit S'pore and bought some Bee Chen Xiang BBQ pork. A) Debit entry in Current a/c (visible trade a/c). B) Credit entry in Current a/c (visible trade a/c). C) Credit entry in Current a/c (invisible trade a/c). D) Debit entry in Current account (invisible trade alc). Show Answer Correct Answer: C) Credit entry in Current a/c (invisible trade a/c). ← PreviousNext →Related QuizzesInternational QuizzesEconomics QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 2Balance Of Payments Quiz 3Balance Of Payments Quiz 5Balance Of Payments Quiz 6Balance Of Payments Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books