Balance of Payments
Economics ⇒ International Trade and Globalisation
Balance of Payments starts at 11 and continues till grade 12.
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Describe the role of the Reserve Bank of India in managing the Balance of Payments.
Explain the difference between foreign direct investment and portfolio investment in the context of the Balance of Payments.
Explain the difference between the current account and the capital account in the Balance of Payments.
Explain the term 'balance of trade'.
Identify whether the following transaction is recorded in the current account or capital account: An Indian company receives a loan from a foreign bank.
If India exports goods worth ₹500 crore and imports goods worth ₹700 crore, what is the balance of trade?
If India receives remittances from Non-Resident Indians (NRIs), in which account will it be recorded?
If the current account shows a deficit of ₹100 crore and the capital account shows a surplus of ₹120 crore, what is the overall BoP balance?
Which of the following is a credit item in the current account? (1) Import of machinery, (2) Payment of interest abroad, (3) Export of software services, (4) Purchase of foreign bonds
Which of the following is a debit item in the capital account? (1) Foreign investment in India, (2) Indian investment abroad, (3) Export of services, (4) Remittances received
Which of the following is a distinguishing feature of accommodating transactions? (1) They are undertaken to correct BoP imbalances, (2) They are profit-motivated, (3) They are always recorded in the current account, (4) They involve only goods
Which of the following is a reason for a country to accumulate foreign exchange reserves? (1) To finance imports, (2) To stabilize the currency, (3) To pay off foreign debt, (4) All of the above
Fill in the blank: The ________ account includes transactions like gifts, grants, and remittances.
Fill in the blank: The ________ account records transactions relating to exports and imports of goods and services.
Fill in the blank: The ________ of payments includes both the current account and the capital account.
Fill in the blank: The capital account records ________ movements such as loans, investments, and banking capital.
State whether the following statement is True or False: 'A country with a BoP surplus will see an increase in its foreign exchange reserves.'
State whether the following statement is True or False: 'A surplus in the current account means the country is a net lender to the rest of the world.'
State whether the following statement is True or False: 'Errors and omissions are included in the Balance of Payments to ensure it balances.'
State whether the following statement is True or False: 'Invisible items are part of the current account.'
