Open Economy Macroeconomics Test 5

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Open Economy Macroeconomics Test 5

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Weekly Quiz Competition

Question 1
1 / -0

_________ are shown on the payment side of a balance of payment account.

A
Import of goods

B
Import of services

C
Import of capital

D
All of the above

Solution

All the options describe sources of leakages from the circular flow of money model, money is flowing out of the economy and thus this will show up as an expense in the payment side of the balance of payments.
Question 2
1 / -0

Balance of payments of a country records the ____________.

A
country's international trading,borrowing and lending

B
country's reserve of foreign exchange reserve

C
country's international indebtness

D
country's worth of human resource

Solution

The balance of payments account comprises of the current account and the capital account. The current account consists of the visible and invisible imports and exports of the country as well as unilateral transfers and income receipts and payments. The capital account includes the capital receipts and capital payments such as portfolio investments. It may also maintain an official reserve account to run either a fixed exchange rate regime or a managed float regime. It accounts the country's transactions with the rest of the world. Thus it includes a country's international trading, borrowing and lending.
Question 3
1 / -0

Resident of X country goes to Y country and utilize the services of Y country,this transaction will be shown as _______ on the balance of payment account.

A
receipt side of Y country and payment side of X country

B
receipt side of X country and payment side of Y country

C
Payment side of Y country

D
receipt side of X country
Question 4
1 / -0

A countries balance of payment account is considered to be in surplus when ________.

A
total export match total imports

B
exports of capital match import of capital

C
if international liquidity has a debit entry

D
if international liquidity has credit entry
Question 5
1 / -0

Balance of payment account includes all of the following, except ____________.

A
capital account

B
current account

C
human resource accounts

D
official settlements account

Solution

The balance of payments account comprises of the current account and the capital account. The current account consists of the visible and invisible imports and exports of the country as well as unilateral transfers and income receipts and payments. The capital account includes the capital receipts and capital payments such as portfolio investments. It may also maintain an official reserve account to run either a fixed exchange rate regime or a managed float regime. It accounts the country's transactions with the rest of the world.
Question 6
1 / -0

A country reflects its international transactions in its _______.

A
balance of trade

B
balance of payment

C
statement of account

D
appropriation account

Solution

The balance of payments accounts comprises the current account and the capital account. The current account consists of the visible and invisible imports and exports of the country as well as unilateral transfers and income receipts and payments.
The capital account includes capital receipts and capital payments such as portfolio investments. It may also maintain an official reserve account to run either a fixed exchange rate regime or a managed float regime.
It accounts for the country's transactions with the rest of the world. Thus it includes a country's international trading, borrowing, and lending.
Question 7
1 / -0

The total balance of payment statement __________.

A
is always in balance

B
may show deficit

C
may show surplus

D
all the three possible

Solution

While the balance of payments account must always balance in an accounting sense, it is possible for the balance of payment account to be in surplus on either the capital or current account, and have and equal amount of deficit to match this surplus.
Question 8
1 / -0

A countries balance of payment account is considered to be in deficit when ________.

A
total export match total imports

B
exports of capital match import of capital

C
if international liquidity has a credit entry

D
if international liquidity has a debit entry
Question 9
1 / -0

Which of these statement is correct about Balance of Payment?

A
Balance of payment account will always balance in accounting sense

B
There can be deficit in balance of payment account

C
There can be surplus in balance of payment account

D
All the three are possible

Solution

While the balance of payments account must always balance in an accounting sense, it is possible for the balance of payment account to be in surplus on either the capital or current account, and have and equal amount of deficit to match this surplus.
Question 10
1 / -0

_____ is used to record changes in the official reserve.

A
Official settlements account

B
Capital account

C
Current account

D
Official Reserve account

Solution

The official settlement account keeps track of transactions mainly involving foreign exchange reserves and special drawing rights but may also include gold, bank deposits. It is used too record changes in the official reserves.

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Re-Attempt Weekly Quiz Competition

Open Economy Macroeconomics Test 5

Result

Open Economy Macroeconomics Test 5

Score

-

Rank

-

SHARING IS CARING

Question 1

Import of goods

Import of services

Import of capital

All of the above

Solution

Question 2

country's international trading,borrowing and lending

country's reserve of foreign exchange reserve

country's international indebtness

country's worth of human resource

Solution

Question 3

receipt side of Y country and payment side of X country

receipt side of X country and payment side of Y country

Payment side of Y country

receipt side of X country

Question 4

total export match total imports

exports of capital match import of capital

if international liquidity has a debit entry

if international liquidity has credit entry

Question 5

capital account

current account

human resource accounts

official settlements account

Solution

Question 6

balance of trade

balance of payment

statement of account

appropriation account

Solution

Question 7

is always in balance

may show deficit

may show surplus

all the three possible

Solution

Question 8

total export match total imports

exports of capital match import of capital

if international liquidity has a credit entry

if international liquidity has a debit entry

Question 9

Balance of payment account will always balance in accounting sense

There can be deficit in balance of payment account

There can be surplus in balance of payment account

All the three are possible

Solution

Question 10

Official settlements account

Capital account

Current account

Official Reserve account

Solution

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