Balance of Payments Quiz

Under an FOB contract, who is responsible for the cost of loading the goods onto the ship?

• Buyer

• Seller

• Shipping company

• Insurance provider

Under a CIF contract, who arranges and pays for the insurance of the goods?

• Buyer

• Seller

• Shipping company

• Customs broker

A trade surplus in the BOP occurs when:

• Exports of goods and services exceed imports.

• Imports of goods and services exceed exports.

• Foreign investments exceed domestic savings.

• There is a surplus in the capital account.

A deficit in the Balance of Payments is financed by:

• Exporting more goods.

• Borrowing from international organizations.

• Reducing domestic consumption.

• Increasing government expenditure.

A current account deficit in the BOP arises when:

• Exports of goods and services exceed imports.

• Imports of goods and services exceed exports.

• Capital inflows exceed capital outflows.

• The country accumulates foreign exchange reserves.

A BOP deficit in the capital account may result from:

• Increased foreign direct investment.

• Reduction in foreign portfolio investments.

• Increase in remittances from abroad.

• Higher exports of goods and services.

__________ beats US to emerge as largest trading partner of India in FY24

• EU

• UAE

• Pakistan

• China

Invisible trade contributes to which component of the Balance of Payments (BOP)?

• Capital account.

• Current account.

• Official reserves.

• Trade balance.

Which of the following is an example of invisible trade?

• Export of automobiles.

• Import of crude oil.

• Export of software services.

• Import of agricultural products.

In invisible trade, "remittances" refer to:

• Payments for import of goods.

• Money sent by citizens working abroad to their home country.

• Investments made in foreign markets.

• Profits earned by foreign companies.