Question : A country's balance of payments must always be_______________.
Option 1: stable
Option 2: balanced
Option 3: surplus
Option 4: deficit
Correct Answer: balanced
Solution : The correct answer is (b) balanced
A country's balance of payments should ideally be balanced, meaning that the inflows and outflows of funds in the current account, capital account, and financial account are equal. However, in practice, it is common for countries to experience deficits or surpluses in their balance of payments. A balanced balance of payments indicates that the country's total receipts from exports, inflows of capital, and financial transactions match its total payments for imports, outflows of capital, and financial transactions.
Question : When a country's imports exceed its exports, it results in:
Option 1: A trade deficit
Option 2: A trade surplus
Option 3: A balance of payments surplus
Option 4: A balance of payments deficit
Question : When a country's imports exceed its exports, it is said to have a:
Option 1: Trade deficit
Option 2: Trade surplus
Option 3: Balance of payments surplus
Option 4: Balance of payments deficit
Question : When a country's exports of goods and services exceed its imports, it is said to have a:
Option 1: Balance of payments surplus
Option 2: Balance of payments deficit
Option 3: Trade deficit
Option 4: Trade surplus
Question : Which of the following is not a type of balance of payments surplus or deficit?
Option 1: Trade surplus or deficit
Option 2: Current account surplus or deficit
Option 3: Capital account surplus or deficit
Option 4: Service account surplus or deficit
Question : ___________ is the difference between a country's exports and imports of goods and services.
Option 3: Balance of payments
Option 4: Current account
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