Economics MCQs

Page No. 366

The current account includes ?


athe value of trade in merchandise

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bservices

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c unilateral transfers

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d All of the above

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View Answer All of the above

A capital account surplus might be expected to cause a current account deficit because the associated ?


acapital outflow would cause the nation’s currency to depreciate contributing to a trade deficit

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bcapital inflow would cause the nation’s currency to depreciate contributing to a trade deficit

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c capital inflow would cause the nation’s currency to appreciate contributing to a trade deficit

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dcapital outflow would cause the nation’s currency to appreciate contributing to a trade deficit

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All of the following are credit items in the balance of payments except ?


ainvestment inflows

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bmerchandise exports

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cpayments for American services to foreigners

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d private gives to foreign residents

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In the balance of payments the statistical discrepancy is used to ?


a insure that the sum of all debits matches the sum of all credits

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b insure that trade imports equals the value of trade exports

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cobtain an accurate account of a balance of payments deficit

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dobtain an accurate account of a balance of payments surplus

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Credit (-) items in the balance of payments correspond to anything that ?


ainvolves receipts from foreigners

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b involves payments to foreigners

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cincreases the domestic money supply

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ddecreases the demand for foreign exchange

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A country that is a net international debtor initially experiences a (an) ?


alarger savings pool available to finance domestic spending

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bhigher interest rate which leads to lower domestic investment

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closs of funds to trading partners overseas

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ddecrease in its services exports to other countries

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Referring to the above table, the U.S balance of international indebtedness suggests that the U.S is a net ?


adebtor

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bcreditor

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cspender

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dexporter

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View Answer creditor

The Baker plan (1985) stressed _______ and the Brady Plan (1989) emphasized _______ respectively?


aIMF decentralization; World Bank dissolution

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bnew loans from multilateral agencies and surplus countries; debt reduction or write-downs

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cstructural adjustment loans for LDCs experiencing unanticipated external shocks; renewed emphases on macroeconomic stabilization programs

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ddebt relief for at leas three-fourths of the eligible HIPCs; shorter requirements for adjustment programs

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Which of the following statement is Not true ?


aThe ratio of debt service to GNP is very good indicator of the debt burden

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b Many large LDC debtors borrowed heavily because of their excellent international credit ratings

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cMiddle income countries account for almost four-fifths of the total outstanding debt of all LDCs

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dThe debt-burden of sub Saharan African countries may be as heavy as for middle income countries

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Shortly after 1979 World Bank introduced loans that emphasized reforms in trade, agriculture industry public enterprise financial energy education or other sectors and were known as ?


aStructural adjustment loans

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bsectoral adjustment loans

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cinternal adjustment loans

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dexternal leverage loans

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