Balance of payments of a country includes ?

Related Mcqs:

1. Starting from a position where the nation’s money demand equals the money supply and its balance of payments is in equilibrium economic theory suggests that the nation’s balance of payments would move into a surplus position if there occurred in the nation a (an) ?

   A. increase in the money demand
   B. decrease in the money demand
   C. increase in the money demand
   D. None of the above

2. Starting from a position where the nation’s money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an) ?

   A. decrease in the money supply
   B. increase in the money supply
   C. decrease in the money demand
   D. None of the above

3. The difference between a country’s balance of payments and its balance of international indebtedness?

   A. is equal to official reserve transactions
   B. occurs because of foreign exchange fluctuations
   C. reflects statistical discrepancies
   D. reflects the difference between flow and stock concepts

4. Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit ?

   A. very high rates of inflation occur domestically
   B. foreigners discriminate against domestic products
   C. technological advance is superior abroad
   D. the domestic currency is undervalued relative to other currencies

5. Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?

   XA. wages and rents should fall in Country A
   B. wages and rents should rise in Country A
   C. wages should rise and rents should fall in Country A
   D. wages should fall and rents should raise in Country A

6. Exchange rate of which of the following currencies falls because of persistent balance of payments deficit ?

   A. Gold currency
   B. Hard currency
   C. Silver currency
   D. Soft currency

7. Debit entries on the balance of payments are the entries that would ?

   A. mean a loss of foreign exchange
   B. bring foreign exchange into the country
   C. indicate a surplus exist
   D. exist at the bottom line after all accounts are totaled

8. Credit (+) items in the balance of payments correspond to anything that ?

   A. involves receipts from foreigners
   B. involves payments to foreigners
   C. increases the domestic money supply
   D. decreases the demand for foreign exchange

9. In the balance of payments travels and tourism are included in the category of ?

   A. unilateral transfers
   B. capital account
   C. merchandise account
   D. services account

10. If the economy is at the peak of the business cycle, aggregate demand ____ unemployment _______ inflation _______ and the current account of the balance of payments is likely to move towards _______?

    A. rise; falls; rise; deficit
    B. falls; rises; falls; surplus
    C. falls; falls; falls; surplus
    D. is static; low; rises; deficit