Balance of Payments

Welcome to Quiz on Balance of Payments

Which of the following has have occurred in India after its liberalization of economic policies in 1991? 1. Share of agriculture in GDP increased enormously. 2. Share of India's exports in world trade increased. 3. FDI inflows increased. 4. India's foreign exchange reserves increased enormously. Select the correct answer using the codes given below:

Which one of the following is correct regarding stabilization and structural adjustment as two components of the new economic policy adopted in India?

One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because:

Economic liberalisation in India started with:

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: 1. Worker productivity per worker (at 2004-05 prices) increased in urban areas while it decreased in rural areas. 2. The percentage share of rural areas in the workforce steadily increased. 3. In rural areas, the growth in the non-farm economy increased. 4. The growth rate in rural employment decreased. Which of the statements given above is/are correct?

Assertion (A): The rate of growth of India's exports has shown an appreciable increase after 1991. Reason (R): The Govt. of India has resorted to devaluation.

Consider the following statements: The price of any currency in international market is decided by the: 1. World Bank 2. Demand for goods/services provided by the country concerned 3. Stability of the government of the concerned country 4. Economic potential of the country in question of these statements: Codes:

Assertion (A): Balance of Payments represents a better Picture of a country economic transactions with the rest of the world than the Balance of Trade Reason (R): Balance of Payments takes into account the exchange of both visible and invisible items whereas balance of Trade does not. Cades:

The balance of payments of a country is a systematic record of

With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristics?

With reference to the international trade of India at present, which of the following statements is/are correct? 1. India's merchandise exports are less than its merchandise imports. 2. India's imports of iron and steel, is chemicals, fertilisers and machinery have decreased in recent years. 3. India's exports of services are more than its imports of services. 4. India suffers from an overall trade/current account deficit: Select the correct answer using the code given below:

Which one of the following is the correct sequence of decreasing order of the given currencies in terms of their value in Indian Rupees?

With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? 1. Balance of trade 2. Foreign assets 3. Balance of invisibles 4. Special Drawing Rights Select the correct answer using the code given below.

The Capital Account Convertibility of the Indian Rupee implies:

Assertion (A): India's software exports increased at an average growth rate of 50 % since 1995-96 Reason (R): Indian software companies were cost-effective and maintained international quality.

Assertion (A): India does not export natural rubber. Reason (R): About 97 % of India s demand for natural rubber is met from domestic production.

Assertion (A): Devaluation of a currency may promote export. Reason (R): Price of the country's products in the international market may fall due to devaluation.

Assertion (A): Ceiling on foreign exchange for a host of current account transaction heads was lowered in the year 2000. Reason (R): There was a fall in foreign currency assets also.

Global capital flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Latin American experience, which type of inflow is good for the host country?

Consider the following statements: Full convertibility of the rupee may mean: 1. Its free float with the international currencies 2. Its direct exchange with any other international currency at any prescribed place inside and outside the country 3. It acts just like any other international currency Which of these statements are correct?

Which of the following constitute Capital Account? 1. Foreign Loans 2. Foreign Direct Investment 3. Private Remittances 4. Portfolio Investment Select the correct answer using the codes given below.

Consider the following statements: The Indian rupee is fully convertible: 1. In respect of Current Account of Balance of payment 2. In respect of Capital Account of Balance of payment 3.Into gold Which of these statements is/are correct?

In the context of India, which of the following factors is/ are contributor/contributors to reducing the risk of a currency crisis? 1. The foreign currency earnings of India's IT sector. 2. Increasing the government expenditure. 3. Remittances from Indians abroad. Select the correct answer using the code given below.

Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?

If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India? 1. Not depending on short-term foreign borrowings 2. Opening up to more foreign banks 3. Maintaining full capital account convertibility. Select the correct answer using the code given below:

Considering the following statements: 1. Purchasing Power Parity (PPP) exchange rates are calculated by the prices of the same basket of goods and services in different countries. 2. In terms of PPP dollars, India is the sixth largest economy in the world. Which of the statements given above is/ are correct?

Which one of the following regions of the world supplies the maximum of our imported commodities (in terms of rupee value)?

Consider the following items imported by India: 1. Capital goods 2. Petroleum 3. Pearls and precious stones 4. Chemicals 5. Iron and Steel The correct sequence of the decreasing order of these items (as per 94-95 figures), in terms of value is:

Which of the following would include Foreign Direct Investment in India? 1. Subsidiaries of foreign companies in India 2. Majority foreign equity holding in Indian companies 3. Companies exclusively financed by foreign companies 4. Portfolio investment Select the correct answer using the codes given below:

In terms of economy, the visit by foreign nationals to witness the XIX commonwealth games in India amounted

Consider the following actions which the government can take: 1. Devaluing the domestic currency. 2. Reduction in the export subsidy. 3. Adopting suitable policies which attract greater FDI and more funds from FIIs. Which of the above action/actions can help in reducing the current account deficit?

Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

Which one of the following sets of commodities are exported to India by arid and semi-arid countries in the Middle East?

Convertibility of rupee implies

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Assertion (A): An important policy instrument of economic liberalization is reduction in import duties on capital goods. Reason (R): Reduction in import duties would help the local entrepreneurs to improve technology to face the global markets. In the context of the above two statements, which one of the following is correct?

Consider the following: 1. Foreign currency convertible bonds of 2. Foreign institutional investment with certain conditions 3. Global depository receipts 4. Non-resident external deposits Which of the above can be included in Foreign Direct Investments?

Consider the following statements: The effect of devaluation of a currency is that it necessarily 1. Improves the competitiveness of the domestic exports in the foreign markets 2. Increases the foreign domestic currency value 3. Improves the trade balance of Which of the above statements is/are correct?

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