BOP & Exchange Rate: Practice Questions

In a floating exchange rate system, the increase in value of the currency is known as

Governments would need to maintain large amounts of foreign reserves to manage its currency in a ____________________ exchange rate system.

Money coming in a country is recorded as a _____________ item on the Balance of Payments.

An export would be recorded as a credit item on the Balance of Trade in the _____________ account, of the Balance of Payments

An MNC sending money back to its parent country would be recorded as a debit item on the ___________ Income of the Current Account.

Charities received by a country would be a credit item on the ___________ income of the Current Account.

A high inflation rate is likely to ______________ the Current Account Deficit if the demand for the country's exports are price elastic.

Current Account deficit caused by increasing income at home and lower incomes abroad is generally termed as a ________________ deficit

Transfers between residents and non residents of money, goods, services not in return for anything else is known as _____________ income.

A growth in MNCs in a country earning large sums of profit will possible cause Current Account ____________.