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EXTREME EDUCATION, , Balance, Of, Payment, MCQ

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EXTREME EDUCATION, 1. Balance of Payments of a country is a statement that records:a) Sources of Foreign Exchange, b) Uses of Foreign Exchange, c) Both a) and b), d) None of the above, , 2. The categories of transactions that are included in current account of Balance of Payments, are:a) Exports and imports of goods, b) (a) + Exports and Imports of services, c) (b) + Income from and to abroad, d) © + Transfers from and to abroad, , 3. Balance of Trade equals:a) Exports less imports, b) Exports of goods less imports of goods, c) Exports of services less imports of services, d) None of the above, , 4. The categories of transactions that are included in the capital account of the Balance of, Payments are:a) Investments from and to abroad, b) Borrowings and lendings from and to abroad

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EXTREME EDUCATION, c) Changes in foreign exchange reserves, d) All the above, , 5. The measurement of Balance of Payments deficit is based on:a) Autonomous transactions, b) Accommodating transactions, c) Current account transactions, d) Capital account transactions, , 6. Choose the correct statement from given below:, a) Balance of trade records the exports and imports of invisible items., b) A surplus in BoT can rectify the deficit in Bop., c) Accommodating items are only recorded in the capital account of the BOP., d) Import of machinery will be recorded in the capital account of BoP., , 7.Choose the correct statement from given below., a) Balance of Trade is a component of the capital account of Balance of Payments., b) Floating exchange rate is used to stabilize the price of foreign currency., c) Increase in the supply of foreign exchange results in a fall in its price, d) Rise in the exchange rate leads to the revaluation of the currency., , 8. Current accounts records all payments to rest of the world as_________and all receipts, from rest of the world as______, , a) Credit, Debit

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EXTREME EDUCATION, b) Debit, Credit, c) Debit, Debit, d) Credit, Credit, , 9. Balance on invisible trade is equal to, a) Export of goods – Import of goods, b) Export of services – Import of services, c) Import of goods – Export of goods, d) Import of services – Export of goods, , 10. If value of visible exports is greater than the value of invisible imports, the balance relates, to, a) Current account Bop, b) Trade Deficit, c) Capital account BoP, d) Can’t be determined, , 11. Balance of trade is a__________concept as compared to balance of payments., , a) narrower, b) broader, c) similar, d) None of the above, 12. If trade deficit is ₹ 1500 crores and import of goods are ₹ 3500 crores, value of export of, goods will be ₹ 2000 crores?, a) True, b) False

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EXTREME EDUCATION, c) Partially true, d) Can’t be predicted, , 13. Trade deficit refers to the situation where, a) Export of goods is more than the import of goods, b) export of goods is less than the import of goods, c) export of services is more than the import of services, d) export of services is less than the import of services, , 14. Uni-lateral transfers are included in, a) current account Bop, b) capital account Bop, c) Both a) and b), d) None of these, , 15. An Indian real estate company received rent from google in New York. This transaction, would be recorded on____________side of_____________account., a) credit, current, b) debit, capital, c) credit, capital, d) debit, current, 16. A company located in India receives a loan from a company located abroad. How is this, Transaction recorded in India’s Balance of Payments Account?, a) Credit side of current account

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EXTREME EDUCATION, b) Debit side of current account, c) Credit side of Capital account, d) Debit side of Capital account, , 17. An Indian Company located in India invests in a company located abroad. This transaction, is entered in India’s Balance of Payments Account on:a) Credit side of current account, b) Debit side of current account, c) Credit side of Capital account, d) Debit side of Capital account, , 18. Foreign Exchange Transactions which are independent of other transactions in the, Balance, Of Payments Account are called:, a) Current transactions, b) Capital transactions, c) Autonomous transactions, d) Accommodating transactions, , 19. Foreign Exchange Transactions dependent on other Foreign Exchange Transactions are, called:, a) Current account transactions, b) Capital account transactions, c) Autonomous transactions, d) Accommodating transactions, , 20. Which of the following statements is not true?

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EXTREME EDUCATION, a) Borrowings from the Asia Development Bank by the government is an accommodating, transaction., b) Loans given to Sri Lanka by the government are an accommodating transaction., c) Buying of machinery from Japan is an accommodating transaction, d) Borrowing from the public is an accommodating transaction., , 21. Who out of the following is included in “Residents” in BoP transactions? a), Firms, b) Foreign military personnel, c) Government agencies, d) Individuals, , 22. An accounting statement that provides a systematic record of all the economic, transactions, between residents of a country and the rest of the world is________, a) Balance of Payments, b) Balance of Trade, c) Government Budget, d) None of these, , 23. Balance of Payments is a___________Concept., a) Stock, b) Flow, c) Both a) and b), d) Neither a) nor b), 24. Inflow of foreign exchange is recorded on the_________side. a), Credit

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EXTREME EDUCATION, b) Debit, c) Either a) or b), d) Neither a) nor b), , 25. When receipts of foreign exchange are more than payments of foreign exchange, BOP is:, a) Balanced, b) Surplus, c) Deficit, d) None of these, , 26. Unilateral Transfers are also known as:, a) Bilateral Transfers, b) One-way Transfers, c) Unrequited Transfers, d) Neither a) nor b), , 27. Balance on ‘Balance of Trade’ can be:, a) Surplus, b) Balanced, c) Deficit, d) Either a) or b) or c), , 28. Which of the following is a component of the Balance of Payment?, a) Current Account, b) Capital Account, c) Nominal Account, d) Real Account

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EXTREME EDUCATION, , 29. Export and import of goods is also known as:, a) Indivisible Trade, b) Visible Trade, c) One-sided Transactions, d) Unrequited transfers, , 30. __________refers to the difference between exports and imports of visible items. a), Balance of Payments, b) Balance of Trade, c) Both a) and b), d) Neither a) nor b), , 31. Autonomous transactions take place on, a) Real Account, b) Capital Account, c) Current Account, d) None of these, , 32. ____________transactions are undertaken to cover the deficit or surplus in autonomous, transactions., a) current account, b) current account, c) Accommodating

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EXTREME EDUCATION, d) None of these, , 33. ________is the difference between value of goods sold to the rest of the world and value, of goods imported from rest of the world., a) Balance of Payment, b) Balance of trade, c) Balance of current account, d) Balance of capital account, , 34. Gifts and remittances to abroad are recorded on the:, a) Credit side of current Account, b) Debit side of Capital Account, c) Debit side of current Account, d) Credi side of Capital Account, , 35. Export of the Machinery recorded on the:, a) Debit side of Current Account, b) Credit side of Current Account, c) Credit side of Capital Account, d) Debit side of capital Account, , 36. Surplus in BoP arises when, a) Autonomous Payments > Autonomous Receipts, b) Accommodating Receipts > Accommodating Payments, c) Accommodating Payments > Accommodating Receipts

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EXTREME EDUCATION, d) Autonomous Receipts > Autonomous Payments, , 37. Balance of Trade is also known as:, a) Balance of Visible Trade, b) Balance of Payments, c) Trade Balance, d) None of these, , 38. Import of Machinery is recorded in the_________Account and ‘Borrowings from abroad’, is recorded in the______Account., a) Current, Capital, b) Capital, Current, c) Capital, Capital, d) Current, Current, , 39. Foreign Exchange transactions are dependent on other foreign exchange transactions are, called:, a) Current Account Transactions, b) Capital Account Transactions, c) Autonomous Transactions, d) Accommodating Transaction, , 40. Foreign Exchange transactions which are independent of other transactions in the Balance, of Payments Account are called:, a) Current Transactions, b) Capital Transactions, c) Autonomous Transactions

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EXTREME EDUCATION, d) Accommodating Transactions, , 41. A company located in India receives a loan from a company located abroad. How is this, transaction recorded in India’s Balance of Payments account?, a) Credit side of current account, b) Debit side of current account, c) Credit side of Capital account, d) Debit side of capital account, , 42. Balance of Payments ‘deficit’ is the excess of:, a) Current account payments over current account receipts, b) Capital account payments over capital receipts, c) Autonomous payments over autonomous receipts, d) Accommodating payments over accomodating receipts, , 43. “Unilateral Transfers’ are also known as:, a) One-way transfers, b) Bilateral transfers, c) Both a) and b), d) Neither a) nor b), , 44. If Japanese import more goods from India:, a) India’s BoP will improve, b) Japan’s BoP will deteriorate, c) India’s BoP will deteriorate, d) Both a) and b)

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EXTREME EDUCATION, 45. Autonomous transactions take place on, a) Capital Account, b) Current Account, c) Both a) and b), d) None of these, , 46. Which one of the following is not recorded in the capital account of BoP?, a) Equity Capital, b) Gifts, Remittances, and grants, c) Government aid, d) Offshore funds, , 47. Measures to improve the adverse balance of payment include:, a) Currency devaluation, b) Import substitution, c) Exchange control, d) All of the above, , 48. Identify the correct statement., a) Balance of Trade is the difference between export and import of goods and services, b) Repayment of the loan is an item of the current account., c) Increase in supply of foreign exchange appreciates the domestic currency, d) Depreciation of currency is used under a fixed exchange rate system., , 49. Identify the correct statement., a) NRI deposits are not the items of capital account of BoP.

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EXTREME EDUCATION, b) BoP is always balanced when accomodating items are reflected as a part of capital account, c) BoT includes services also, d) Autonomous items help in balancing the BoP, , 50. Decrease in foreign exchange reserve will be recorded on the:, a) Credit side of BoP, b) Debit side of BoP, c) Not added in BoP, d) Any side, , 51. Borrowings from IMF is a part of:, a) Current Account, b) Capital Account, c) Both a) and b), d) None of these, , 52. Surplus in Balance of Payment (BoP) arises when:, a) Autonomous payments > Autonomous receipts, b) Accommodating receipts > Accommodating payments, c) Accommodating payments > Accommodating receipts, d) Autonomous receipts > Autonomous payments, , 53. Export of Machinery is recorded on the:, a) debit side of capital account, b) credit side of current account, c) credit side of capital account, d) debit side of capital account

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EXTREME EDUCATION, 54. Which of the following items raises the supply of foreign exchange?, a) Import of goods from china, b) Indian students going to USA for MBA, c) Donation of ₹50 million received from Microsoft, d) Purchase of land in England, , 55. Which one is the invisible item of Balance of Payment?, a) Banking, b) Shipping, c) Communication, d) All of these, , 56. Which items are included in the Balance of Payments?, a) Visible Items, b) Invisible Items, c) Capital Transfers, d) All the above, , 57. When there is unfavourable balance of trade?, a) X>M, b) X = M, c) X<M, d) None of these, , 58. Trade of visible items between the countries is known as________, a) Balance of Payment

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EXTREME EDUCATION, b) Blanance of Trade, c) Deficit Balance, d) All of these, , 59. ‘Make in India’ will increase the balance of:, a) Debit side of BoP, b) Credit side of BoP, c) Both of these, d) None of these, , 60. Investment abrod in case of surplus BoP is an example of:, a) Autonomous transaction, b) Accommodating transaction, c) Both a) and b), d) Neither a) nor b), , 61. Export of capital goods is an:, a) Autonomous item, b) Accommodating Item, c) Both autonomous and accommodating, d) Neither autonomous nor accommodating, , 62. Which of the following statements is false?, a) Current account of BoP records export and import of goods and services only., b) Foreign investments are also part of BoT

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EXTREME EDUCATION, c) Import of Machinery is the component of capital account of BoP, d) All of the above, , 63. Borrowing from IMF is a part of:, a) Current Account, b) Capital Account, c) Both a) and b), d) None of these, , 64. Which of the following is a component of capital account of balance of payment account?, a) Foreign investment, b) Foreign loans, c) Monetary movements, d) All of these, , 65. Unilateral are a part of:, a) Capital Account, b) Current Account, c) Balance of Trade Account, d) Balance of Payment Account and Current Account, , 66. A company located in India receives a loan from a company located abroad. How is this, transaction recorded in India’s baance of payments account?, a) Credit side of current account, b) Debit side of current account, c) Credit side of capital account, d) Debit side of capital account

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EXTREME EDUCATION, 67. Foreign exchange transactions which are independent of other transactions in the Balance, of Payments accounts are called:, a) Current transactions, b) Capital transactions, c) Autonomous transactions, d) Accommodating transactions, , 68. Foreign exchange transactions dependent on other foreign exchange transactions are, called:, a) Current account transactions, b) Capital account transactions, c) Autonomous transactions, d) Accommodating transactions