This quiz works best with JavaScript enabled. Home > Economics > International > Bop > Balance Of Payments – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Calculate the US current account balance in $ bn:Balance of Trade in Goods:-$ 900Balance of Trade in Services:$ 200Net Primary Income:$ 190Net Secondary Income:-$ 110 A) $ 1400. B) -$ 700. C) $ 90. D) $ -620. Show Answer Correct Answer: D) $ -620. 2. Current transaction are of which nature? A) Flow. B) Stock. C) Both a and b. D) None of above. Show Answer Correct Answer: A) Flow. 3. Which of the following are NOT included in balance of trade? A) Exports of goods. B) Exports of services. C) Investments by local firms abroad. D) Imports of goods and services. Show Answer Correct Answer: C) Investments by local firms abroad. 4. The table shows information from a country's currentaccount of its balance of payments. What is the country's current account balance? A) -$ 15 billion. B) + $ 1 billion. C) -$ 7 billion. D) -$ 4 billion. Show Answer Correct Answer: A) -$ 15 billion. 5. Balance of payments of a country includes: A) Current account. B) Moentary account. C) Capital account. D) All of above. Show Answer Correct Answer: D) All of above. 6. Reducing tariffs during a period of high domestic inflation would cause the current account to: A) Improve and boost domestic employment. B) Worsen and increase foreign debt. C) Worsen and boost domestic employment. D) None of above. Show Answer Correct Answer: B) Worsen and increase foreign debt. 7. It helps countries to meet deficit in balance of payments: A) WTO. B) IMF. C) UNO. D) World Bank. Show Answer Correct Answer: B) IMF. 8. Investments made by domestic firms of the country in another country are included where? A) In the current account. B) In the capital account. C) In the balance of trade section. D) None of the above. Show Answer Correct Answer: B) In the capital account. 9. B O P Impacts on Key Macroeconomic Rates A) Inflation rates. B) Unemployment rate. C) Exchange rates. D) Interest rates. Show Answer Correct Answer: B) Unemployment rate. 10. What is not a part of the BoP A) Current Account. B) Investment Account. C) Financial Account. D) Capital Account. Show Answer Correct Answer: B) Investment Account. 11. A US car dealer agrees an import price of US$ 25000 for aJapanese car at the current rate of exchange. Then US dollarthen weakens by 10% against the Japanese yen. What willbe the new import paid for the Japanese car? A) US$ 25000. B) US$ 20000. C) US$ 22500. D) US$ 27500. Show Answer Correct Answer: D) US$ 27500. 12. If China export goods worth rs 20 crores and imports goods worth rs 30 crores. it will have a A) Surplus of rs10 crs in balance of trade. B) Deficit of rs10 crs in balance of trade. C) Deficit of rs50 crs in balance of trade. D) None of above. Show Answer Correct Answer: B) Deficit of rs10 crs in balance of trade. 13. What impact does an appreciated currency have on a trade deficit? A) Increases. B) Decreases. C) Stays the same. D) None of above. Show Answer Correct Answer: A) Increases. 14. Which exchange rate is officially declared by the government? A) Managed Floating Rate. B) Floating Exchange Rate. C) Fixed Exchange Rate. D) None. Show Answer Correct Answer: C) Fixed Exchange Rate. 15. A Chinese firm export goods to Singapore A) Credit entry in Capital a/c. B) Credit entry in Current a/c (Invisible trade a/c). C) Debit entry in Capital a/c. D) A debit entry in Current a/c (Visible trade a/c). Show Answer Correct Answer: D) A debit entry in Current a/c (Visible trade a/c). 16. Invisible items in balance of payments include: A) Foreign remittances. B) Income from tourists. C) Internet charges. D) All the three. Show Answer Correct Answer: D) All the three. 17. Which of the following shows a current account surplus? 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: B) Export revenue is greater than import spending. 18. The U.S. Federal Reserve sells $ 4 million worth of Treasury bonds to a Chinese investor. This would be recorded as A) Current account. B) Financial account. C) Official reserves account. D) None of above. Show Answer Correct Answer: B) Financial account. 19. Which of the following appears in the balance of trade figures? A) Short-term private capital inflow. B) Exports and imports of services. C) Exports of wool. D) Overseas aid by Australian aid groups. Show Answer Correct Answer: A) Short-term private capital inflow. 20. If 120 are required to buy $ 1, instead of 100 rupees earlier: A) Domestic currency has appreciated. B) Domestic currency has depreciated. C) Rupee value of import bill will increase. D) Both a and c. Show Answer Correct Answer: D) Both a and c. 21. The current account on a country's Balance of Payments is most likely to benefit from a depreciation of its currency when it is experiencing A) Price elastic demand for imports. B) Full employment. C) Price inelastic demand for exports. D) High interest rates. Show Answer Correct Answer: A) Price elastic demand for imports. 22. The exchange rate determined by the free play of the forces of demand and supply of foreignexchange is: A) Flexible Exchange Rate. B) Fixed Exchange Rate. C) Managed Floating. D) None. Show Answer Correct Answer: A) Flexible Exchange Rate. 23. A Dutch firm exports goods to Russia A) Credit in Dutch Capital a/c. B) Debit in Dutch Capital a/c. C) Debit in Dutch Current a/c. D) Credit in Dutch Current a/c. Show Answer Correct Answer: D) Credit in Dutch Current a/c. 24. USA citizens buys Swiss government bonds. This will get recorded in the USA BoP ac as, A) Visible balance outflow. B) Investment income outflow. C) Financial ac outflow. D) Investment income inflow. Show Answer Correct Answer: C) Financial ac outflow. 25. What is a reason for trade protection? A) To reduce economic growth. B) To reduce a surplus on the current account of the balance ofpayments. C) To reduce inflation. D) To reduce a deficit on the current account of the balance ofpayments. Show Answer Correct Answer: D) To reduce a deficit on the current account of the balance ofpayments. 26. In the balance of payments, interest payments are included in A) Services. B) Merchanidse trade. C) Net transfers. D) Capital account. Show Answer Correct Answer: A) Services. 27. Due to the deprication of foreign currency, the supply of foreign currency in domestic economy will A) Not change. B) Increase. C) Decrease. D) Wither increase or decrease. Show Answer Correct Answer: C) Decrease. 28. If India export goods worth rs 20 crs and imports goods worth rs 30 crs.it will have a A) Surplus of rs10 crs in balance of trade. B) Deficit of rs10 crs in balance of trade. C) Deficit of rs50 crs in balance of trade. D) None of above. Show Answer Correct Answer: B) Deficit of rs10 crs in balance of trade. 29. Other things remaining unchanged, when in a country, the price of foreign currency rises, national income is A) Likely to rise. B) Likly to fall. C) Likely to rise and fall both. D) Not affected. Show Answer Correct Answer: B) Likly to fall. 30. Current account may be A) Visible items. B) Invisible items. C) Unilateral transactions. D) All of above. Show Answer Correct Answer: D) All of above. ← PreviousNext →Related QuizzesInternational QuizzesEconomics QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 2Balance Of Payments Quiz 3Balance Of Payments Quiz 4Balance Of Payments Quiz 5Balance Of Payments Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books