Finals

Question 1

is a systematic
record of all economic transactions between the residents of the reporting country
and residents of foreign countries during a given period of time”.

Answer 1

Balance of payments

Question 2

Difference between the value of a country’s exports
and the value of a country’s imports for a given period.

Answer 2

Balance of trade

Question 3

Also referred to as the trade balance, the international
trade balance, commercial balance, or the net exports.

Answer 3

Balance of trade

Question 4

Includes all transactions related to visible,
invisible and capital transfers

Answer 4

Balance of payments

Question 5

Includes only visible items

Answer 5

Balance of trade

Question 6

Can be favorable or unfavorable

Answer 6

Balance of trade

Question 7

Broader term

Answer 7

Balance of payments

Question 8

Statement of actual receipts and payments
in short period.

Answer 8

Current account

Question 9

It includes the value of export and imports
of both visible and invisible goods.

Answer 9

Current account

Question 10

It is the net of export and imports of goods

Answer 10

Visible trade

Question 11

It is the net of exports and imports of services

Answer 11

Invisible trade

Question 12

It refers to payments that are not factor payments

Answer 12

Unilateral transfers to and from abroad

Question 13

It refers to payments that are not factor payments

Answer 13

Income receipts and payments

Question 14

It records all international transactions that
involve a resident of the country concerned
changing either his assets with or his
liabilities to a resident of another country.

Answer 14

Capital account

Question 15

It involves inflows and outflows relating to
investments, short term borrowings/lending,
and medium term to long term borrowing.

Answer 15

Capital account

Question 16

works to achieve sustainable growth and prosperity for all of its 190
member countries.

Answer 16

International monetary fund

Question 17

is an international reserve asset
created by the IMF to supplement the official reserves of its member
countries.

Answer 17

Special drawing rights

Question 18

gold reserve, a fund of gold bullion or coin
held by a government or bank, as distinguished from a private hoard of
gold held by an individual or nonfinancial institution.

Answer 18

Reserves and monetary gold

Question 19

Surplus in the BOP occurs when Total Receipts exceeds Total
Payments

Answer 19

Condition on surplus or deficit

Question 20

Deficit in the BOP occurs when Total Payments exceeds Total
Receipts

Answer 20

Deficit

Question 21

concerned with money supply and credit in
the economy which will affect the prices.

Answer 21

Monetary policy

Question 22

Government’s policy on income and expenditure

Answer 22

Fiscal policy

Question 23

Depending upon the situation governments expenditure may be
increased or decreased.

Answer 23

Fiscal policy

Question 24

By reducing the value of the
domestic currency, government can correct the disequilibrium in
the BOP in the economy.

Answer 24

Exchange rate depreciation

Question 25

lowering the exchange value of the official
currency.

Answer 25

Devaluation

Question 26

is the reduction in the quantity of money
to reduce prices and incomes.

Answer 26

Deflation

Question 27

In the domestic market, when the
currency is deflated, there is a decrease in the income of the
people.

Answer 27

Deflation

Question 28

All exporters are directed by the
monetary authority to surrender their foreign exchange earnings, and
the total available foreign exchange is rationed among the licensed
importers.

Answer 28

Exchange control