This quiz works best with JavaScript enabled. Home > International > Bop > Balance Of Payments – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Hedging is possible in: A) Spot market. B) Forward market. C) Managed floating market. D) None of these. Show Answer Correct Answer: B) Forward market. 2. An undervalued currency encourages A) Exports. B) Imports. C) Current account deficit. D) None of above. Show Answer Correct Answer: A) Exports. 3. What is difference between the value of exports of goods and value of imports of goods called A) Balance of payment. B) Balance of trade. C) Disinvestment. D) All of these. Show Answer Correct Answer: B) Balance of trade. 4. 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. 5. Balance of payments of a country has parts: A) 2. B) 3. C) 4. D) 6. Show Answer Correct Answer: B) 3. 6. 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. 7. 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. 8. Payments of dividends by a foreign firms to Singaporeans. A) Debit entry in Current a/c. B) Credit entry in Current a/c. C) Debit entry in capital a/c. D) Credit entry in Capital a/c. Show Answer Correct Answer: B) Credit entry in Current a/c. 9. Which account indicating reserves of Forex in the Central Bank of Trinidad and Tobago A) Cash reserve account. B) Gold reserve account. C) Official reserve account. D) Twin Tower Account. Show Answer Correct Answer: C) Official reserve account. 10. Foreign exchange transactions which are independent of other transactions in BOP account are called: A) Current transaction. B) Capital transactions. C) Autonomous transactions. D) Accommodating transactions. Show Answer Correct Answer: C) Autonomous transactions. 11. Balance of Payments 'deficit' is the excess of: A) Current account of payments over current account receipts. B) Capital account payments over capital account receipts. C) Autonomous payments over autonomous receipts. D) Accommodating payments over a accommodating receipts. Show Answer Correct Answer: C) Autonomous payments over autonomous receipts. 12. 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. 13. 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. 14. 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. 15. 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. 16. 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) Deflates. C) Raises. D) Lowers. Show Answer Correct Answer: C) Raises. 17. 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. 18. Singapore decides to spend more in maintaining her diplomats in the Philippines. A) Debit entry in Capital 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 a/c (Invisible a/c). Show Answer Correct Answer: D) Debit entry in Current a/c (Invisible a/c). 19. 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. 20. 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. ← PreviousNext →Related QuizzesInternational QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 2Balance Of Payments Quiz 3Balance 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