This quiz works best with JavaScript enabled. Home > International > Bop > Balance Of Payments – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Balance Of Payments Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. 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) A higher interest rates. B) B higher investment spending. C) C higher tariffs. D) D higher taxes. Show Answer Correct Answer: B) B higher investment spending. 3. 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. 4. Singapore tourists buy a few LV handbags from Europe. A) Credit entry in current account (visible trade a/c). B) Debit entry in current account (visible trade a/c). C) Credit entry in current a/c (invisible trade a/c). D) Debit entry in current a/c (invisible trade a/c). Show Answer Correct Answer: D) Debit entry in current a/c (invisible trade a/c). 5. US entrepreneur receives earnings from a factory they own in Portugal. This will be recorded in the USA BoP as, A) Invisible balance inflow. B) Investment income inflow. C) Financial ac inflow. D) Transfers inflow. Show Answer Correct Answer: B) Investment income inflow. 6. The stock of physical and financial assets held by a country around the world is known as the A) International Investment Position. B) Portfolio Investment Flows. C) Investment income. D) Foreign Direct Investment. Show Answer Correct Answer: A) International Investment Position. 7. Foreign exchange transactions which are dependent of other foreign exchangetransactions are called: A) Current account transactions. B) Capital account transactions. C) Autonomous transactions. D) Accommodating transactions. Show Answer Correct Answer: D) Accommodating transactions. 8. 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. 9. 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. 10. Which of the following structural factors would reduce a trade deficit? A) An appreciation of the exchange rate. B) An increase in multifactor productivity growth. C) Additional regualtion of the business sector. D) An increase in the company tax rate. Show Answer Correct Answer: B) An increase in multifactor productivity growth. 11. When India takes a loan from IMF, it is a.. A) Capital payment. B) Capital receipt. C) Transfer payment. D) Transfer receipt. Show Answer Correct Answer: B) Capital receipt. 12. The major source of Australia's CAD is the ..... section. A) Goods. B) Services. C) Primary income. D) Secondary income. Show Answer Correct Answer: C) Primary income. 13. 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. 14. Exports involve A) Goods out, money out, credit in the Current Account. B) Goods out, money in, credit in the Current Account. C) Goods out, money in, credit in the Financial Account. D) Goods out, money out, debit in Current Account. Show Answer Correct Answer: B) Goods out, money in, credit in the Current Account. 15. 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 income account. C) As a goods credit in the capital account. D) As a goods debit in the current account. Show Answer Correct Answer: D) As a goods debit in the current account. 16. 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. 17. 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. 18. 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. 19. Which one of the following items are not the transactions of balance of trade A) Export of jute. B) Import of steel. C) Banking services providedin other countries. D) Import of food items. Show Answer Correct Answer: C) Banking services providedin other countries. 20. 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) B when it reduces tariffs on its imports. C) C when it revalues its currency. D) D when it removes export subsidies. Show Answer Correct Answer: A) A when it raises its rate of income tax. ← PreviousNext →Related QuizzesInternational QuizzesBalance Of Payments Quiz 1Balance Of Payments Quiz 2Balance Of Payments Quiz 3Balance Of Payments Quiz 4Balance Of Payments Quiz 5Balance 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