Balance of Payments-Important Questions

IMPORTANT QUESTIONS

CHAPTER 22: Balance of Payments

1. Define balance of payments?
2. What is meant by balance of trade?
3. When will balance of trade show a deficit?
4. The balance of trade shows a deficit of Rs. 300 crores. The value of exports is Rs. 500 crores. What is the value of imports?
5. What is current account deficit in the balance of payments?
6. State the components of capital account of balance of payments?
7. Distinguish between balance of trade and balance of payments?
8. Which transactions determine the balance of trade? When is balance of trade in surplus?
9. Explain the meaning of deficit in a balance of payments account?
10. Distinguish between current account and capital account of balance of payment account. Is import of machinery recorded in current account or capital account?
11. Discuss the components of current account?
12. Explain the distinction between autonomous and accommodating transactions in balance of payments. Also explain the concept of balance of payments deficit in this context.
13. What are the causes for deficit in balance of payment?
14. What are accommodating items?