Balance of Payments

Q.

The authorised reduction in the value of a currency against other currencies is known as:

1. Appreciation

2. Revaluation

3. Depreciation

4. Devaluation

Q.

How does the fiscal deficit affect the economy?

Q.

Can an increase in the deposits rate increase the money multiplier?

Q.

In India, the balance of payments has

1. Regularly been skewed to a deficit

2. Regularly been skewed to a surplus

3. Remained constant

4. Always been balanced

Q.

Dummy (to be removed) Which of the following incidents triggered the BOP crisis in 1991?

1. Mounting external debt

2. Rising import bill

3. Rising foreign reserves

4. Devaluation

Q.

Who agreed to loan funds to help India recover from its BOP Crisis?

1. International Monetary Fund

2. World Bank

3. Bank of England

4. Royal Bank of Scotland

Q.

Suppose that 1$= Rs. 60.

The demand for rupees increases and then the exchange rate is such that 1$=Rs. 55. This is an example of which of the following:

1. Appreciation

2. Revaluation

3. Devaluation

4. Depreciation

Q.

Which of the following incidents triggered the BOP crisis in 1991?

1. Mounting external debt

2. Rising import bill

3. Rising foreign reserves

4. Devaluation

Q.

In a BOP crisis, foreign reserves of the economy are generally rising. State true or false.

1. True

2. False