Balance of Payments and Foreign Exchange Online Test

Which Policy used to switch Expenditure to calculate a Deficit in the Balance of Payments?
Monetary Policy
Fiscal Policy
encouraging foreign tourists
Devaluation
Revaluation
Which of the following is not included in the Current Account of the Balance Payments?
Travel and Transportation
Government Loans
Government Transfer Payments
Private Transfer Payments
None of the above
Which of the following is an assumption in the Automatic Income Adjustment Mechanism? I A Fixed Exchange Rate System II Constant Internal Prices and Interest Rates III Less than Full Employment
I only
II only
III only
I and III
I, II and III
Disequilibrium in the Balance of Payments can be corrected by which Trade Measures? I Appreciation of the Exchange Rate II Encouraging Exports III Discouraging Imports
I only
II only
III only
I and II
II and III
An example of a Debit in the Current Account of Balance of Payments is:
Exports of goods
Exports of Banking Services
Insurance provided to a foreigner
Gift received from a foreigner
Gift given to a foreigner
Which of the following is not a Monetary measure taken by the Government to control Disequilibrium in Balance of Payments?
Devaluation of Currency
Encouraging Foreign Investments
Encouraging foreign tourists to visit the country
Exchange Rate Control
None of these
By imposing Duties or Tariffs on imports, a nation: I cuts down the demand for Imports II stimulates Investments and promotes recovery III corrects Disequilibrium of Balance of Payments
I only
II only
III only
I and III
I, II and III
Foreign Exchange is: I an important constituent of Balance of Trade II the exchange of goods and services between two countries III a system by which different nations clear off their international obligations
I only
II only
III only
I and III
II and III
A Surplus in the Balance of Payments is when:
The Demand for Foreign Exchange exceeds its Supply
There is inflow of Income into the country
There is outflow of Income from the country
Imports exceed Exports
All of the above
The Purchasing Power Parity Theory was propounded by:
Gustav Cassel
Marshall
Kindleberger
Ricardo
Jacob Viner
Description:

The systematic recording of economic transactions between residents of the reporting country and that of foreign countries during a given period of time is known as Balance of Payments. Foreign Exchange is the system by which different nations clear off their international obligations. Here is a 7-minute short Multiple Choice questions test relating to the various aspects of Balance of Payments, Balance of Trade, Current Account, Capital Account, Disequilibrium in the Balance of Payments, Trade Measures, Monetary Measures, Adjustment Mechanism, Foreign Exchange and Theories of Foreign Exchange. While taking this test, go through all the options very carefully and then, mark your answers.

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EnglishteachersVinodita Sankhyan Namrata Arora
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