MCQs - Balance Of Payment Commerce Notes | EduRev

Crash Course of Macro Economics -Class 12

Commerce : MCQs - Balance Of Payment Commerce Notes | EduRev

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Q.1 Which of the following items is entered on the credit side of BOP account ?

(a)  Investment from abroad
(b) Import of goods

(c) Gifts paid to foreigners
(d) Repayment of foreign loan
Ans: A

Outflow of foreign exchange is recorded on the ____ sides.

(a) Credit
(b) Debit

(c) Either
(d) Neither 
Ans: B

Transactions that take place to cover deficit or surplus are called ____ transactions.

(a) Accommodating
(b) Autonomous
(c) Current account
(d) Above the line
Ans: A

Q.4 When receipts of foreign exchange are less than payments of foreign exchange, then BOP is:
(a) Deficit
(b) Surplus
(c) Balanced
(d) None of these
Ans: A

Foreign exchange transaction dependent on other foreign exchange transactions are called : 
(a) Current account transaction
(b) Capital account transaction
(c) Autonomous transaction
(d) Accommodating transaction
Ans: D

Dr. Manjeet Singh is an NRI, settled in Canada.  He deposits $1 million with bank in India.  This would be treated as a

(a) Credit entry in capital account.
(b) Credit entry in current account
(c) Debit entry in capital account
(d) Debit entry in current account
Ans: A

External deficit of an economy refers to

(a) Fiscal deficit
(b) Current account deficit in BOP
(c) Revenue deficit

(d) Trade deficit
Ans: B

If a country carries a deficit in its current account, such a deficit can be financed by 

(a) Printing of new currency
(b) Raising the rate of corporate taxes.
(c) Restricting imports.
(d) Borrowing foreign exchange from an international source.
Ans: D

Who out of the following is not included in “Residents” in BOP transactions ?

(a) Firms
(b) Foreign military personnel
(c) Government agencies
(d) Individuals
Ans: B

“Unilateral Transfers” are also known as :

(a) Bilateral Transfers
(b) One-way Transfers

(c) Both (a) and (b)
(d) Neither (a) nor (b)
Ans: B

Autonomous transactions take place on :

(a) Current Account only

(b) Capital Account only

(c) Both Current and Capital accounts
(d) Neither
Ans: C

Autonomous items are related to those transactions which :

(a) are determined by motive of profit
(b) are not concerned with the equilibrium status of BOP
(c) both (a) and (b)
(d) none of these
Ans: C

Accommodating items are those items of BOP which:

(a) are not determined by considerations of profit

(b) are conditioned by the positive or negative BOP status

(c) lead to increase or decrease in official reserves with RBI

(d) all of these
Ans: D

Cause of BOP imbalance relates to :

(a) autonomous items

(b) accommodating items
(c) both (a) and (b)
(d) neither (a) nor (b)
Ans: A

If balance of trade indicates a surplus of Rs. 20,000 lakhs and the imports of goods is half of the exports of goods, then the value of exports will be:

(a) Rs. 20,000

(b) Rs. 10,000

(c) Rs. 30,000

(d) Rs. 40,000
Ans: D

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