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MCQs - Balance Of Payment | Crash Course of Macro Economics -Class 12 - Commerce PDF Download

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

Q.2 
Outflow of foreign exchange is recorded on the ____ sides.

(a) Credit
(b) Debit

(c) Either
(d) Neither
Ans: B

Q.3 
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

Q.5 
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

Q.6 
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

Q.7 
External deficit of an economy refers to

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

(d) Trade deficit
Ans: B

Q.8 
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

Q.9 
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

Q.10 
“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

Q.11 
Autonomous transactions take place on :

(a) Current Account only

(b) Capital Account only

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

Q.12 
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

Q.13 
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

Q.14 
Cause of BOP imbalance relates to :

(a) autonomous items

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

Q.15 
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

- You can cover the concepts of Class 12 Macro Economics by going through the course: 

Crash Course of Macro Economics -Class 12

- You can attempt reason based & extra questions of Balance of Payment here. 

The document MCQs - Balance Of Payment | Crash Course of Macro Economics -Class 12 - Commerce is a part of the Commerce Course Crash Course of Macro Economics -Class 12.
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FAQs on MCQs - Balance Of Payment - Crash Course of Macro Economics -Class 12 - Commerce

1. What is the Balance of Payment?
Ans. The Balance of Payment is a record of all financial transactions made between a country and the rest of the world during a specific period. The Balance of Payment is divided into two main components, the current account, and the capital account. The current account records trade in goods and services, while the capital account records any financial transactions such as investments.
2. What are the components of the Balance of Payment?
Ans. There are two main components of the balance of payment, the current account, and the capital account. The current account records trade in goods and services, income flows, and unilateral transfers. The capital account records any financial transactions such as investments, loans, and money flows between countries.
3. Why is the Balance of Payment important?
Ans. The Balance of Payment is important because it provides information about a country's economic health and its position in the global economy. It shows the country's financial transactions with the rest of the world, including its imports and exports, foreign investments, and loans. It also helps countries make decisions about monetary and fiscal policies, which can affect the country's economic growth.
4. What is a surplus in the Balance of Payment?
Ans. A surplus in the Balance of Payment occurs when a country's exports exceed its imports, and it receives more payments from the rest of the world than it makes to them. This means that the country has saved money in foreign currency, which can be used to pay off debts or invest in foreign assets. A surplus is considered a positive sign for a country's economy.
5. What is a deficit in the Balance of Payment?
Ans. A deficit in the Balance of Payment occurs when a country's imports exceed its exports, and it makes more payments to the rest of the world than it receives from them. This means that the country has spent more money on foreign transactions than it has earned, which can lead to a decrease in foreign reserves and an increase in debts. A deficit is considered a negative sign for a country's economy.
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