HB COMMERCE CLASSES (C) no

GRADE-12 (D) both (i) and (ii)

MACROECONOMICS
1. Which of the following items is entered on the credit side of the 5. Outflow of foreign exchange is recorded on the
B0P account? ___________sides.
(A) Investment from abroad (A) credit
(B) Import of goods (B) debit
(C) Gifts paid to foreigners (C) either (I) or (ii)
(D) Repayment of foreign loan (D) neither (I) nor (ii)

2. An account indicating a systematic record of all economic 6. Which of the following is a component of the capital account of
transactions between residents of a country and residents of foreign BoP?
countries during a period of account is called ___________Account. (A) Export and import of goods
(A) Balance of Trade (B) Export and import of services
(B) Balance of Payment (C) Unilateral transfers
(C) Government budget (D) Sale of assets to foreigners
(D) None of these
7. Which of the following is included in the balance of trade?
3. Current account of BoP records (A) Shipping
(A) Exports and import of goods (B) Insurance
(B) Exports and import of services (C) Imports of goods
(C) Unilateral transfers from and to foreigners (D) Unilateral transfers
(D) All of these
8. Transactions that take place to cover deficit or surplus are called
4. There is__________ relationship between exchange rate and ___________transactions.
supply of foreign exchange. (A) accommodating. (B) autonomous
(A) a direct (C) current account (D) above the line
(B) an inverse
9. The balance of trade shows a deficit of 500 crore. The value of 13. Balance of payment is a
exports is Rs. 700 crore. Find the value of imports. (A) flow
(A) Rs. 700 crore (B) stock
(B) Rs.1200 crore (C) both (I) and (ii)
(C) Rs.900crore (D) neither (I) nor (ii)
(D) Rs. 200 crore
14.Devaluation which means fall in value of domestic currency in terms
10. Which of the following is a source of demand for foreign of foreign currency takes place in ________
currency? (A) Flexible Exchange Rate regime
(A) Foreign tourists visiting India (B) Fixed Exchange Rate regime
(B) Exports of goods and services (C) both (I) and (ii)
(C) Imports of goods (D) neither (I) nor (ii)
(D) All of these
15. A change from Rs. 60 =1$ to 62 = 1$ indicates that has
11. When receipts of foreign exchange are less than payments of ____________
foreign exchange, then B0P is: (A) appreciated
(A) deficit (B) depreciated
(B) surplus (C) neither (I) nor (ii)
(C) balanced (D) either (I) or (ii)
(D) none of these
16. The net value of balance of visible trade, invisible trade and of
12.Under flexible exchange rate system, exchange rate is determined unilateral transfers is __________
(A) by the government (A) Balance of capital account
(B) by market forces of demand and supply (B) Balance of current account
(C) by Central Bank of a country (C) Balance of trade
(D) none of these (D) Balance of payments
17. Demand curve of foreign exchange is
(A) downward sloping
(B) upward sloping
(C) vertical straight line parallel to Y-axis
(D) horizontal straight line parallel to X-axis
21. BoP is measured as:
(A) difference between invisible items of exports and imports
(B) difference between visible items of exports and imports
(C) difference between internal and external flow of gold
(D) difference between all receipts and payments of foreign exchange

18. Indian rupee is appreciated in terms of British pound because of 22. BoP is in disequilibrium when
(A) falling demand of pounds (A) current account balance + capital account balance is not equal to
(B) shortage of pounds zero
(C) more supply of Indian rupees (B) current account balance + capital account balance is some positive
(D) less demand for Indian rupees number
(C) current account balance + capital account balance is negative
19. ______________refers to the difference between exports and number.
imports of visible items. (D) All of these
(A) Balance of payments
(B) Balance of trade 23. Which of the following transactions is/are recorded in the
(C) both (I) and (ii) current account of BoP? (A) import and export of goods and services
(D) neither (I) nor (ii) (B) transfer from one country to another.
(C) Both(a)and(b)
20. Export of goods and services raises the__________ of foreign (D) None of these
exchange.
(A) demand 24. Other things remaining the same, when in a country market price
(B) supply of foreign currency falls, national income is likely:
(C) both (I) and (ii) (A) to rise
(D) neither (I) nor (ii) (B) to fall
(C) to rise and fall both
(D) Not affected
25. Other things remaining unchanged, when in a country, price of 29. Dr. Manjeet Singh is an NRI, settled in Canada. He deposits $1
foreign currency rises, national income is _____________: million with a bank in India. This would be treated as a
(A) Likely to rise (a) credit entry in capital account
(B) Likely to fall (b) credit entry in current account.
(C) Likely to rise and fall both (c) debit entry in capital account.
(D) Not affected (d) debit entry in current account

26.Foreign exchange transactions dependent on other foreign 30. External deficit of an economy refers to
exchange transactions are called __________ : (a) fiscal deficit.
(A) Current account transactions (b) current account deficit in BoP.
(B) Capital account transactions (c) revenue deficit.
(C) Autonomous transactions (d) trade deficit.
(D) Accommodating transactions
31. If you are given the following data,
27. Foreign exchange transactions which are independent on other (i) Total exports of merchandise Rs. 1,000 crore
transactions in the Balance of Payments Account are called: (ii) Total imports of merchandise Rs. 1,200 crore
(A) Current transactions (iii) Total exports of invisibles Rs. 100 crore
(B) Capital transactions (iv) Total imports of invisibles Rs. 100 crore
(C) Autonomous transactions Then, balance of trade would be
(D) Accommodating transactions (a) Surplus of Rs. 100 crore
(b) Deficit of Rs. 100 crore
28. A company located in India receives a loan from a company located (c) Surplus of Rs. 200 crore
abroad. How is this transaction recorded in India’s BoP account? (d) Deficit of Rs. 200 crore
(A) Credit side of current account
(B) Debit side of current account 32. In Ques 31 , the current account on balance of payments shows
(C) Credit side of capital account (a) a deficit ofRs. 200 crore. (b) a surplus of Rs. 200 crore.
(D) Debit side of capital account (c) a deficit of Rs. 100 crore. (d) a surplus of Rs. 100 crore.
33. In Ques 31, the capital account must have 37.Which of the following events can be expected to occur as a
(a) a credit balance of Rs. 200 crore. response to an expansion of exports of India?
(b) a debit balance of Rs. 200 crore. (a) Appreciation of rupee
(c) a credit balance of Rs. 300 crore. (b) Depreciation of dollar
(d) a debit balance ofRs. 100 crore. (c) Depreciation of rupee
(d) All of the above.
34. In Ques 31, if a country's capital account shows a credit balance
of Rs. 300 crore its foreign exchange reserves will 38. If rupee is getting depredated fast and is considered undesirable
(a) fall. by the government the RBI may be advised to
(b) increase (a) sell dollars in the foreign exchange market.
(c) remain unaffected. (b) purchase dollars in the foreign exchange market.
(d) swing either way. (c) print more currency notes.
(d) raise tariffs on imports.
35.If at a given point of time, the rate of exchange of $ 1 = Rs. 60
has changed into $1 = Rs. 50, we will say that 39. If in an effort to control depreciation of rupee the RBI puts more
(a) the rupee has appreciated. dollars in the supply, it may lead to greater inflation, caused by
(b) the rupee has revalued. (a) increase in money supply in the economy.
(c) the rupee has devalued. (b) reduced availability of goods due to increased exports.
(d) the dollar has appreciated (c) reduced availability of goods due to reduced imports.
(d) All of the above.
36. If at a given point of time, the exchange value of dollar changes
from $1 = Rs. 60 to $1 = Rs. 65, we cannot say precisely that 40. If a country carries a deficit in its current account, such a deficit
(a) the rupee has devalued. can be financed by
(b) the rupee has appreciated. (a) printing of new currency.
(c) the rupee has depreciated. (b) raising the rate of corporate taxes.
(d) All of the above. (c) restricting imports.
(d) borrowing foreign exchange from an international source.
41.Long-term concessional development assistance is generally
provided by
(a) IMF.
(b) WTO.
(c) IBRD.
(d) IDA.

42. Which of the following statements is correct with regard to the

external sector in the post-reform period?
(a) Quantitative restrictions have been imposed on a number of
tradeable items.
(b) Quantitative restrictions have been removed from most of the
items except a few goods.
(c) The tariff walls have been further raised.
(d) Foreign investment is now being discouraged.