This quiz works best with JavaScript enabled. Home > International > Bop > Balance Of Payments – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... is a situation when 'managed floating' is exercised by the central bank. A) Crawling peg. B) Spot market. C) Dirty Floating. D) None of these. Show Answer Correct Answer: C) Dirty Floating. 2. A company located in India receives a loan from a company located abroad. How is this transaction recorded in India's balance of payments account? A) Credit side of current account. B) Debit side of current account. C) Credit side of capital account. D) Debit side of capital account. Show Answer Correct Answer: C) Credit side of capital account. 3. Payments of dividends by a foreign firms to Belgians. A) Debit in Belgian Current a/c. B) Credit in Belgian Current a/c. C) Debit in Belgian Capital a/c. D) Credit in Belgian Capital a/c. Show Answer Correct Answer: B) Credit in Belgian Current a/c. 4. How is spending by tourists visiting the UK recorded in the BoP? A) As a service debit in the current account. B) As an income credit in the current account. C) As a service credit in the current account. D) As a service credit in the capital account. Show Answer Correct Answer: C) As a service credit in the current account. 5. Suppose in BOP occurs when A) Receipts =payments. B) Receipts < payments. C) Receipts > payments. D) Both a and c. Show Answer Correct Answer: C) Receipts > payments. 6. When currency depreciates imports become more A) Stays the same. B) Cheaper. C) Expensive. D) None of above. Show Answer Correct Answer: C) Expensive. 7. The purchase and sale of stocks, bonds, real estate and businesses relate 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. 8. Payments of profits by a Japanese firm in Singapore to its parent company in Tokyo. A) Credit entry in capital a/c. B) Debit entry in capital a/c. C) Credit entry in current a/c. D) Debit entry in current a/c. Show Answer Correct Answer: D) Debit entry in current a/c. 9. When Balance of payments Balance A) Current account + capital account = zero. B) Official reserve account is a part of current account. C) Official reserve account is a part of capital account. D) Both a and c. Show Answer Correct Answer: D) Both a and c. 10. Which of the following items are not a part ofcapital account? A) Loans. B) Banking capital transactions. C) Unilateral transactions. D) Portfolio investment. Show Answer Correct Answer: C) Unilateral transactions. 11. In which of the following categories are there transactions of balance of trade recorded? A) Visible items. B) Invisible items. C) Capital transfers. D) All of these. Show Answer Correct Answer: A) Visible items. 12. Japanese tourists visit the USA and buy some BBQ ribs. A) Credit in US Capital a/c. B) Credit in US Current a/c. C) Debit in US Current a/c. D) Debit in US Capital a/c. Show Answer Correct Answer: B) Credit in US Current a/c. 13. What is the difference between the value of exports and value of imports of goods called? A) Balance of payments. B) Foreign exchange. C) Balance of Trade. D) Disequilibrium. Show Answer Correct Answer: C) Balance of Trade. 14. If the US dollar appreciates relative to the Japanese yen, then A) More yen will be required to purchase one dollar. B) The dollar has weakened relative to the yen. C) Fewer yen will be required to purchase on dollar. D) The Japanese supply of yen will increase. Show Answer Correct Answer: A) More yen will be required to purchase one dollar. 15. A Chinese firm export goods to Australia-this is recorded in Australia's BoP as A) Credit entry in Current a/c (Services). B) A debit entry in Current a/c (Goods). C) Credit entry in Capital a/c. D) Credit entry in Current a/c (Goods). Show Answer Correct Answer: B) A debit entry in Current a/c (Goods). 16. Invisible items includes A) Capital. B) Goods. C) Services. D) All. Show Answer Correct Answer: C) Services. 17. Why may a government seek to reduce a current account surplus on the balance of payments?(Winter 2013) A) A to lower inflation. B) B to lower unemployment. C) C to raise the economic growth rate. D) D to raise the exchange rate. Show Answer Correct Answer: A) A to lower inflation. 18. What would be the best policy for a country to reduce a balance of payments deficit?(Winter 2016) A) A an increase in interest rates. B) B an increase in the exchange rate. C) C a reduction in direct taxes. D) D a reduction in subsidies to domestic industry. Show Answer Correct Answer: C) C a reduction in direct taxes. 19. Which of the following is not a part of current account A) Export of goods. B) Imports of services. C) Grants and gifts. D) FDI. Show Answer Correct Answer: D) FDI. 20. A potential problem with free floating exchange is that A) Exchange rates may never reach equilibrium. B) The currency markets may become monopolised. C) Uncertainty in exchange rate fluctuations can hinder trade. D) None of above. Show Answer Correct Answer: C) Uncertainty in exchange rate fluctuations can hinder trade. ← PreviousNext →Related QuizzesInternational QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 3Balance Of Payments Quiz 4Balance Of Payments Quiz 5Balance Of Payments Quiz 6Balance Of Payments Quiz 7Balance Of Payments Quiz 8Balance Of Payments Quiz 9Balance Of Payments Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books