Which of the following statements accurately describes the role of foreign trade in economic development?

Foreign trade has no impact on the economic development of a country.

Foreign trade allows a country to specialize in producing goods it's efficient at, leading to economic growth.

Foreign trade always leads to unemployment and reduced national income.

Foreign trade only benefits developed countries, not developing ones.

What is the primary purpose of the Balance of Trade?

To track all economic transactions done by a country with the rest of the world.

To record only the imports and exports of goods in a country.

To determine the overall economic stability of a nation.

To regulate the money supply and interest rates.

Which of the following statements is true about the Balance of Payments?

It only records transactions related to goods.

It includes both tangible and intangible items.

It only covers capital transfers.

It is a component of the Balance of Trade.

What is the primary goal of fiscal policy?

To regulate the money supply in the economy.

To control the flow of credit in the economy.

To influence the overall demand and supply for goods and services.

To manage the interest rates in the banking sector.

What happens when a country's Balance of Trade shows a trade surplus?

The country is importing more than it is exporting.

The country is exporting more than it is importing.

The country's economy is in a state of instability.

The country's currency depreciates.

What is the main focus of monetary policy?

Strengthening government revenue through taxes.

Controlling government expenditure.

Regulating the overall demand and supply for goods.

Bringing price stability and controlling inflation.

What is the main difference between fiscal policy and monetary policy?

Fiscal policy is administered by the central bank, while monetary policy is administered by the Ministry of Finance.

Fiscal policy focuses on regulating the money supply, while monetary policy influences the overall demand and supply for goods.

Fiscal policy involves adjusting interest rates, while monetary policy involves managing government expenditure.

Fiscal policy uses taxation and government spending, while monetary policy uses tools like interest rates and credit ratios.

What is the primary purpose of the Capital Account in the Balance of Payments?

To record imports and exports of goods.

To track capital expenditures made by the government.

To keep a record of financial inflows and outflows related to foreign investments.

To manage government revenue and expenditure.

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