This quiz works best with JavaScript enabled. Home > Economics > International > Bop > Balance Of Payments – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The purchase of an overseas company by an Australian firm. A) Credit entry in Capital & Financial a/c. B) Debit entry in Current a/c. C) Debit entry in Capital & Financial a/c. D) Credit entry in Current a/c. Show Answer Correct Answer: C) Debit entry in Capital & Financial a/c. 2. Dirty floating is related to: A) Fixed System of exchange rate. B) Flexible system of exchange rate. C) Bathe a and b. D) None of these. Show Answer Correct Answer: B) Flexible system of exchange rate. 3. Which of these lead to a credit in the BOP A) Unilateral transfer made to resident of another country. B) Export of goods. C) Import of services. D) Import of goods. Show Answer Correct Answer: B) Export of goods. 4. Capital inflow will be increased by A) A rise in the exchange rate. B) A rise in domestic interst rates. C) A fall in the current account deficit. D) All of the above. Show Answer Correct Answer: A) A rise in the exchange rate. 5. Which of the following is FALSE concerning trade? A) Trade balance can result in a deficit. B) Trade balance can result in a surplus. C) Trade balance is equal to exports-imports. D) Trade surplus in the U.S. started in 1975. Show Answer Correct Answer: D) Trade surplus in the U.S. started in 1975. 6. Which of the following items related to BOP on capital account? A) Foreign investment. B) Loans. C) NRI remittances. D) All of these. Show Answer Correct Answer: D) All of these. 7. Which of the following shows a current account deficit? A) Export revenue = import spending. B) Export revenue is greater than import spending. C) Export revenue is less than import spending. D) None of above. Show Answer Correct Answer: C) Export revenue is less than import spending. 8. The ..... records the purchases and sales of assets between residents of one country and those of another country. A) Current account. B) Official reserves account. C) Debt account. D) Capital account. Show Answer Correct Answer: D) Capital account. 9. Imports into the UK are likely to rise as a result of A) Rising UK national income. B) The external value of Sterling decreases. C) Households saving more of their income. D) UK prices rising more slowly than prices in other countries. Show Answer Correct Answer: A) Rising UK national income. 10. Balance of Trade is the part of: A) Current account BOP. B) Capital account BOP. C) Official reserve account. D) None of these. Show Answer Correct Answer: A) Current account BOP. 11. A Chinese firm export goods to S'pore A) A debit entry in Current a/c (Visible trade a/c). B) Credit entry in Current a/c (Invisible trade a/c). C) Debit entry in Capital a/c. D) Credit entry in Capital a/c. Show Answer Correct Answer: A) A debit entry in Current a/c (Visible trade a/c). 12. Balance of Payments is a ..... concept. A) Flow as well as stock. B) Flow. C) Stock. D) Neither Flow nor stock. Show Answer Correct Answer: B) Flow. 13. The account that tracks the flow of currency and other monetary assets used to purchase financial and physical assets A) Current Account. B) Capital Account. C) Errors and Omission Section. D) Balance of Trade Section. Show Answer Correct Answer: B) Capital Account. 14. Which of the following is a form of asset included in the official reserves account? A) Reserve positions at the WTO. B) Special drawing rights. C) Government bond. D) Inconvertible currencies. Show Answer Correct Answer: B) Special drawing rights. 15. The rate which is determined by the government is known as A) Flexible exchange rate. B) Fixed exchange rate. C) Floating exchange rate. D) None of these. Show Answer Correct Answer: B) Fixed exchange rate. 16. Balance of Trade refers to balance of exports and imports of: A) Visible items. B) Invisible items. C) Both. D) None. Show Answer Correct Answer: A) Visible items. 17. Which is not included in the current account? A) Income. B) Trade in goods. C) Transfer of ownership in fixed assets. D) Trade in services. Show Answer Correct Answer: C) Transfer of ownership in fixed assets. 18. In which account are foreign direct investments included A) Financial account. B) Net capital transfer account. C) Income account. D) Current account. Show Answer Correct Answer: A) Financial account. 19. ..... involves transactions related to transfers of assets and liabilities in BoP account A) Current account. B) Balance of trade account. C) Unilateral transfer account. D) Capital account. Show Answer Correct Answer: D) Capital account. 20. Big Dave, a UK citizen, buys a villa in France. This would be registered on: A) The Balance of Trade in Services. B) The Balance of Trade in Goods. C) The Capital/Financial Account. D) Investment incomes. Show Answer Correct Answer: C) The Capital/Financial Account. 21. Foreign investor payments for the purchase of BHP-Billiton shares would be recorded in Australia's A) Goods section of the current account. B) Capital account. C) Primary income section of the current account. D) Financial account. Show Answer Correct Answer: D) Financial account. 22. India decides to spend more in maintaining its diplomats in the South Korea. A) Debit in Indian Capital a/c. B) Credit in Indian Current a/c. C) Debit in Indian Capital a/c. D) Debit in Indian Current a/c. Show Answer Correct Answer: D) Debit in Indian Current a/c. 23. Which of the following shows a balanced current account? A) Export revenue = import spending. B) Export revenue is greater than import spending. C) Export revenue is less than import spending. D) None of above. Show Answer Correct Answer: A) Export revenue = import spending. 24. BoP os measured as: A) Difference between visible items of exports and imports. B) Difference between invisible items of Exports and imports. C) Difference between external and internal flow of gold. D) Difference between all RECEIPTS of foreign exchange and payments of foreign exchange. Show Answer Correct Answer: D) Difference between all RECEIPTS of foreign exchange and payments of foreign exchange. 25. An Indian company located in India invests in a company located abroad. This transaction is entered in India's balance of payments account on: A) Debit side of capital account. B) Debit side of current account. C) Credit side of current account. D) Credit side of capital account. Show Answer Correct Answer: A) Debit side of capital account. 26. Accommodating transactions are A) Balanceing in nature. B) Below the line. C) Both a and b. D) Neither a nor b. Show Answer Correct Answer: C) Both a and b. 27. The Malaysian government buys a new Boeing 787 from the U.S. This transaction is recorded in the Malaysian A) Current account. B) Financial/capital account. C) Official reserves. D) None of above. Show Answer Correct Answer: A) Current account. 28. Accommodating items are those items of BOP which A) Are not determined by considerations of profit. B) Are considered by the positive or negative BOP status. C) Lead to increase or decrease in official reserves with RBI. D) All of these. Show Answer Correct Answer: D) All of these. 29. Disney purchases a new cruise ship from Italy. A) Financial Account/Deficit. B) Current Account/Deficit. C) Current Account/Surplus. D) Financial Account/Surplus. Show Answer Correct Answer: B) Current Account/Deficit. 30. All else equal, if Euro Area raises its interest A) The dollar depreciates and the US demand for euros increases. B) The US demand for euros increases. C) The Euro Area supply of euros increases. D) None of above. Show Answer Correct Answer: A) The dollar depreciates and the US demand for euros increases. ← PreviousNext →Related QuizzesInternational QuizzesEconomics QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 2Balance Of Payments Quiz 3Balance Of Payments Quiz 4Balance Of Payments Quiz 6Balance Of Payments Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books