30+ Balance of Payment and WTO MCQ’s | (Free Resource) Business Economics

Balance of Payment and WTO MCQ

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1. Unilateral transfers _________ .
a) are unrequited transfers
b) are one-way transfers
c) include gifts/remittances
d) all of the above

2. Unilateral flows in the balance of payment account refer to ________ .
a) capital flows
b) Gifts and Grants
c) visible goods flows
d) invisible flow of services

3. The full form of TRIMs is _______ .
a) Trade Related Investment Measures
b) trade related insurance measures
c) trade related investment methods

4. WTO was set up on _________ .
a) 1st January 1995
b) 1st June 1985
c) 31st July 1995
d) 1st January 2000

5. GATS stands for _______ .
a) General Agreement on Tariff and Services
b) General Agreement on Transport and Services
c) General Agreement on Trade in Services

6. Autonomous capital flows ______ other items in the balance of payments.
a) depend on
b) are related to
c) are independent of
d) have impact on

7. The current account in the balance of payments _________ .
a) includes merchandise trade and services
b) is a total of all the visible items of trade
c) includes borrowings
d) includes autonomous and accommodating flows

8. A deficit in India’s Balance of Trade in recent times is due to ________ .
a) rise in price of crude oil
b) increase in imports
c) reduction in exports
d) all of the above

9. Good performance on _________ has helped India to reduce its current a/c balance deficit in recent times.
a) invisible account
b) trade account
c) capital account

10. There is an increase in _________ on India’s capital a/c in recent times.
a) non-debt foreign investment flows
b) private transfers
c) private remittances
d) unilateral receipts

Answers: 1)all of the above 2)Gifts and Grants 3)Trade Related Investment Measures 4)1st January 1995 5)General Agreement on Trade in Services 6)are independent of 7)includes merchandise trade and services 8)Mixing quota 9)invisible account 10)non-debt foreign investment flows

11. After covering deficits on current a/c, excess capital a/c receipts are added to _______ .
a) IMF account
b) foreign exchange reserves
c) official transfers

12. Bank capital on India’s capital a/c includes __________ .
a) foreign exchange reserves
b) local withdrawal from NRI rupee deposits
c) foreign currency deposits – NRI deposits
d) official transfers

13. Private transfers on India’s current account include ________ .
a) foreign currency deposits
b) Local withdrawal from NRI rupee deposits
c) foreign exchange reserves

14. International trade increases the welfare of ________ .
a) all participating countries
b) only exporting countries
c) only importing countries
d) none of the above

15. WTO agreements incorporated ________ proposals.
a) Adam Smith
b) David Ricardo
c) John M. Keynes
d) Arthur Dunkel

16. _________ has given mandate to negotiate multilateral rules relating to services.
a) WTO
b) World Bank
c) IMF
d) ADB

17. Foreign direct investment is a part of _________ .
a) trade account
b) Capital account
c) current account
d) none of the above

18. External borrowing is treated as ________ flow.
a) Accommodative
b) Autonomous
c) invisible
d) none of the above

19. Foreign exchange reserves of India include _________ .
a) Special Drawing Rights
b) Foreign Currency reserves
c) Reserve Tranche of IMF
d) All of the above

20. The highest authority of WTO is _________ .
a) The Ministerial Conference
b) The Trade Policy Review Body
c) The General Council
d) The DisputeSettlement Body

Answers: 11)foreign exchange reserves 12)foreign currency deposits – NRI deposits 13)Local withdrawal from NRI rupee deposits 14)all participating countries 15)Arthur Dunkel 16)WTO 17)Capital account 18)Accommodative 19)All of the above 20)The Ministerial Conference

21. The Agreement on Agriculture does not aim at ________ .
a) Improving market access
b) reducing domestic subsidies
c) Increasing export subsidies
d) reducing domestic support

22. Intellectual property rights include ________ .
a) copyrights
b) layout designs
c) trade marks
d) All of the above

23. The current account balance of BoP does not include _________ .
a) FDI
b) services exports
c) unilateral transfers
d) non-factor services

24. _________ is not a part of unilateral transfers.
a) Short term loans
b) gifts
c) donations
d) remittances by workers

25. ________ is not a direct measure to correct BoP disequilibrium.
a) quotas
b) tariffs
c) Devaluation of exchange rate
d) import substitution

26. When BoP disequilibrium is chronic in nature and lasts for a longtime, it is a sign of ________ disequilibrium.
a) cyclical
b) structural
c) fundamental
d) monetary

27. When disequilibrium takes place due to changes in demand pattern for exports or imports, it is a case of _________ disequilibrium.
a) structural
b) cyclical
c) long-term
d) short-term

28. TRIMs agreement refers to treating foreign investment at ________ with domestic investment.
a) par
b) premium
c) discount
d) inequity

29. The effectiveness of devaluation depends on ________ .
a) international cooperation
b) elasticity of demand for merchandise goods
c) elasticity of demand for services
d) All of the above

30. Foreign exchange reserves of India include ________ .
a) SDRs
b) Foreign Currency Assets
c) Gold Reserves
d) All of the above

Answers: 21)Increasing export subsidies 22)All of the above 23)FDI 24)Short term loans 25)Devaluation of exchange rate 26)fundamental 27)structural 28)par 29)All of the above 30)All of the above

31. In the past several years, India’s capital account balance was in ________ .
a) surplus
b) deficit
c) balance
d) none of the above

32. Portfolio foreign investment is included in _______ account of BoP.
a) current
b) capital
c) trade
d) debit

33. Expenditure switching policies to correct BoP deficit include ________ of domestic currency.
a) devaluation
b) appreciation
c) revaluation
d) all of the above

34. Tariffs and quotas are imposed on imports to correct BoP deficit are called as ________ measures.
a) indirect
b) passive
c) direct
d) all of the above

35. The sum of the total export-import demand elasticity must be ________ .
a) equal to one
b) zero
c) greater than one
d) less than one

36. In the past several years, India’s net invisibles were in _________ .
a) surplus
b) deficit
c) balance
d) none of the above)

Answers: 31)surplus 32)capital 33)devaluation 34)direct 35)greater than one 36)surplus