Test: Open Economy Macrcoeconomics- Case Based Type Question- 1 - Commerce MCQ
10 Questions MCQ Test Economics Class 12 - Test: Open Economy Macrcoeconomics- Case Based Type Question- 1
Read the news report given below and answer the question that follow on the basis of the same:
The trade deficit between India and China in April-June this fiscal year fell to USD 5.48 billion as compared to USD 13.1 billion in the same period last year, Parliament was informed on Wednesday.
In a written reply, Commerce and Industry Minister Piyush Goyal said the bilateral trade between the countries dipped to USD 16.55 billion during the first three months of 2020-21 as against USD 21.42 billion in the same period last year. “Government has consistently taken steps to balance our trade with China by increasing our exports to China and reducing our dependence on imports from China,” he said.
In a separate reply, the minister said at present, about 550 tariff lines (or products) are under the restricted/prohibited category for imports under the Foreign Trade Policy. Imports of these products are restricted from all countries, including China.
Replying to a separate question, he said merchandise exports from special economic zones (SEZs) dipped to ₹81,481 crore during AprilAugust, 2020 as against ₹1,30,129 crore in the same period of 2019-20. “However, services exports have shown a growth of 9 per cent during April to August 2020 in comparison to corresponding period of previous year,” he added.
Q. The bilateral trade between India and China dipped to ___________.
Read the news report given below and answer the question that follow on the basis of the same:
The trade deficit between India and China in April-June this fiscal year fell to USD 5.48 billion as compared to USD 13.1 billion in the same period last year, Parliament was informed on Wednesday.
In a written reply, Commerce and Industry Minister Piyush Goyal said the bilateral trade between the countries dipped to USD 16.55 billion during the first three months of 2020-21 as against USD 21.42 billion in the same period last year. “Government has consistently taken steps to balance our trade with China by increasing our exports to China and reducing our dependence on imports from China,” he said.
In a separate reply, the minister said at present, about 550 tariff lines (or products) are under the restricted/prohibited category for imports under the Foreign Trade Policy. Imports of these products are restricted from all countries, including China.
Replying to a separate question, he said merchandise exports from special economic zones (SEZs) dipped to ₹81,481 crore during AprilAugust, 2020 as against ₹1,30,129 crore in the same period of 2019-20. “However, services exports have shown a growth of 9 per cent during April to August 2020 in comparison to corresponding period of previous year,” he added.
Q. Considering the steps taken by the government to reduce the Trade deficit with China, choose the correct alternative:
(i) To reduce the dependence on imports from China.
(ii) To increase our exports to China
(iii) To make Rupees stronger than Yuan
(iv) To prohibit the use of Chinese goods.
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Read the news report given below and answer the question that follow on the basis of the same:
The trade deficit between India and China in April-June this fiscal year fell to USD 5.48 billion as compared to USD 13.1 billion in the same period last year, Parliament was informed on Wednesday.
In a written reply, Commerce and Industry Minister Piyush Goyal said the bilateral trade between the countries dipped to USD 16.55 billion during the first three months of 2020-21 as against USD 21.42 billion in the same period last year. “Government has consistently taken steps to balance our trade with China by increasing our exports to China and reducing our dependence on imports from China,” he said.
In a separate reply, the minister said at present, about 550 tariff lines (or products) are under the restricted/prohibited category for imports under the Foreign Trade Policy. Imports of these products are restricted from all countries, including China.
Replying to a separate question, he said merchandise exports from special economic zones (SEZs) dipped to ₹81,481 crore during AprilAugust, 2020 as against ₹1,30,129 crore in the same period of 2019-20. “However, services exports have shown a growth of 9 per cent during April to August 2020 in comparison to corresponding period of previous year,” he added.
Q. 550 tariff lines (or products) are under the restricted/prohibited category for _________ under the Foreign Trade Policy.
Read the news report given below and answer the question that follow on the basis of the same:
The trade deficit between India and China in April-June this fiscal year fell to USD 5.48 billion as compared to USD 13.1 billion in the same period last year, Parliament was informed on Wednesday.
In a written reply, Commerce and Industry Minister Piyush Goyal said the bilateral trade between the countries dipped to USD 16.55 billion during the first three months of 2020-21 as against USD 21.42 billion in the same period last year. “Government has consistently taken steps to balance our trade with China by increasing our exports to China and reducing our dependence on imports from China,” he said.
In a separate reply, the minister said at present, about 550 tariff lines (or products) are under the restricted/prohibited category for imports under the Foreign Trade Policy. Imports of these products are restricted from all countries, including China.
Replying to a separate question, he said merchandise exports from special economic zones (SEZs) dipped to ₹81,481 crore during AprilAugust, 2020 as against ₹1,30,129 crore in the same period of 2019-20. “However, services exports have shown a growth of 9 per cent during April to August 2020 in comparison to corresponding period of previous year,” he added.
Q. Which of the following has seen growth?
Read the news report given below and answer the question that follow on the basis of the same:
A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.
In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.
Q. The Forex resources have surged in India. What effect does it have on the country?
Read the news report given below and answer the question that follow on the basis of the same:
A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.
In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.
Q. Which of the following is not the benefit of a lower trade deficit?
Read the news report given below and answer the question that follow on the basis of the same:
A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.
In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.
Q. FDI inflows is recorded in which of the following accounts of Balance of Payment:
Read the news report given below and answer the question that follow on the basis of the same:
A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.
In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.
Q. FDI inflows in March is a type of _____________.
Read the news report given below and answer the question that follow on the basis of the same:
NEW DELHI: India’s balance of payments this year is going to be “very very strong” on the back of significant improvement in exports and a fall in imports, Commerce and Industry; Minister Piyush Goyal said on Monday.
He said that “good” green shoots are visible in the economy and exports have shown a “good” turnaround. “We are in July at about 91 per cent export level of July 2019 figures. Imports are still at about 70-71 percent of July 2019. So, broadly our balance of payments this year is going to be very very strong, which is why we feel confident that Indian industry will see opportunities for themselves, will
see opportunities of growth,” he said at a FICCI webinar.
India’s exports fell for the fourth straight month in June as shipments of key segments like petroleum and textiles declined but the country’s trade turned surplus for the first time in 18 years as imports dropped by a steeper 47.59 per cent.
The country posted a trade surplus of USD 0.79 billion in June.
Q. Consider the following statements:
(i) It will get a lot of investments.
(ii) The government can achieve its development goals.
(iii) Increase the GDP of the economy.
(iv) It is more profitable for the domestic manufacturers.
Which of the following is the true benefit of having a strong Balance of Payment:
Read the news report given below and answer the question that follow on the basis of the same:
NEW DELHI: India’s balance of payments this year is going to be “very very strong” on the back of significant improvement in exports and a fall in imports, Commerce and Industry; Minister Piyush Goyal said on Monday.
He said that “good” green shoots are visible in the economy and exports have shown a “good” turnaround. “We are in July at about 91 per cent export level of July 2019 figures. Imports are still at about 70-71 percent of July 2019. So, broadly our balance of payments this year is going to be very very strong, which is why we feel confident that Indian industry will see opportunities for themselves, will
see opportunities of growth,” he said at a FICCI webinar.
India’s exports fell for the fourth straight month in June as shipments of key segments like petroleum and textiles declined but the country’s trade turned surplus for the first time in 18 years as imports dropped by a steeper 47.59 per cent.
The country posted a trade surplus of USD 0.79 billion in June.
Q. Why is India having a very strong Balance of Payment?
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