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Class 10 Exam  >  Class 10 Tests  >  Test: Current Account of Balance of Payments - Class 10 MCQ

Test: Current Account of Balance of Payments - Class 10 MCQ


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10 Questions MCQ Test - Test: Current Account of Balance of Payments

Test: Current Account of Balance of Payments for Class 10 2025 is part of Class 10 preparation. The Test: Current Account of Balance of Payments questions and answers have been prepared according to the Class 10 exam syllabus.The Test: Current Account of Balance of Payments MCQs are made for Class 10 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Current Account of Balance of Payments below.
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Test: Current Account of Balance of Payments - Question 1
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What are the two primary sections of the Balance of Payments (BoP)?

Detailed Solution for Test: Current Account of Balance of Payments - Question 1
The Balance of Payments (BoP) consists of the current account and the capital account. These sections track all financial transactions between a country and the rest of the world.
Test: Current Account of Balance of Payments - Question 2
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How are money inflows and outflows recorded in the Balance of Payments?

Detailed Solution for Test: Current Account of Balance of Payments - Question 2
In the Balance of Payments, money inflows are recorded as credits (+), while outflows are recorded as debits (-).
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Test: Current Account of Balance of Payments - Question 3
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What does a surplus in the current account of the Balance of Payments indicate?

Detailed Solution for Test: Current Account of Balance of Payments - Question 3
A surplus in the current account occurs when a country's exports (credits) exceed its imports (debits).
Test: Current Account of Balance of Payments - Question 4
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Which of the following is included in the current account of the Balance of Payments?
Detailed Solution for Test: Current Account of Balance of Payments - Question 4
The current account includes net income from international dealings, such as goods, services, and income transfers.
Test: Current Account of Balance of Payments - Question 5
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What is a consequence of a current account deficit?
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A consequence of a current account deficit can be heightened borrowing levels, as imports may be financed through increased borrowing.
Test: Current Account of Balance of Payments - Question 6
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How can a government address a current account deficit through expenditure-switching policies?
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Governments can address a current account deficit by implementing protectionist measures to raise import prices, thus encouraging domestic consumption.
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What economic impact does a current account surplus typically have?
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A current account surplus can lead to demand-pull inflation due to increased exports stimulating economic growth and demand.
Test: Current Account of Balance of Payments - Question 8
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How do expenditure-reducing strategies help stabilize the current account balance?
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Expenditure-reducing strategies like raising taxes can reduce consumer disposable income, leading to decreased spending on imports and potentially stabilizing the current account balance.
Test: Current Account of Balance of Payments - Question 9
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What is a supply-side initiative that governments can use to enhance the current account balance?
Detailed Solution for Test: Current Account of Balance of Payments - Question 9
Governments can invest in education to enhance productivity, making exports more competitive and potentially improving the current account balance.
Test: Current Account of Balance of Payments - Question 10
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What are the primary sections of the Balance of Payments that a current account balance affects?
Detailed Solution for Test: Current Account of Balance of Payments - Question 10
The current account balance affects the capital and financial sections of the Balance of Payments due to its impact on a country's overall financial position.
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