Saturday, May 23, 2015

Day 36 - Questions


Day 36 - Balance of Payments (BOP)

( Balance of Payments, BOP Deficit, Current Account Deficit (CAD), Trade Deficit, BOP Accounts - Current, Capital and Financial Accounts )


Recommended Study links - (Go through these topics before attempting MCQs)


1.  Which of the following is true regarding Balance of Payments (BOP)?
i.  It is a record of all financial transactions performed between the residents of a country and the rest of the world
ii.  It is more concerned with transactions, rather than actual payments
iii.  It always balances, i.e., inward and outward transaction is always equal

a.  Only (i) is true
b.  Only (i) and (ii) are true
c.  Only (i) and (iii) are true
d.  All (i), (ii) and (iii) are true

2.  If the outward transactions are greater than the inward transactions, then the country faces -
a.  BOP Deficit
b.  BOP Surplus
c.  BOP balanced
d.  None of the above

3.  Which of the following is/are type(s) of BOP Accounts?
a.  Current Account
b.  Capital Account
c.  Financial Account
d.  All of the above

4.  Which of the followings is/are component(s) of Current Account?
i.  Goods
ii.  Services
iii.  Income
iv.  Current transfers, like remittances, donations, aids, etc.

a.  All except (iv)
b.  Only (i) and (ii)
c.  Only (iii) and (iv)
d.  All (i), (ii), (iii) and (iv)

5.  Current Account Deficit (CAD) will happen, if -
a.  outflow from Current Account is greater than inflow in that account
b.  inflow to Current Account is greater than outflow from that account
c.  inflow and outflow is balanced in Current Account
d.  none of the above

6.  Which of the following is/are considered in Capital Account?
a.  Non-financial assets, such as lands, etc.
b.  Non-produced assets, such as mine, etc.
c.  Both (a) and (b)
d.  None of the above

7.  Which of the following falls in Financial Account?
a.  Direct investment (e.g., FDI, ODI, etc.)
b.  Portfolio investment
c.  Reserve assets
d.  All of the above

8.  Trade Deficit occurs, when -
a.  Exports are greater than Imports
b.  Imports are greater than Exports
c.  Imports and Exports are balanced
d.  None of the above


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