Current Account of the Balance of Payments Quiz by Shubhrata Shrestha | Jun 2, 2025 | 0 comments Current Account of the Balance of Payments Quiz 1. Which of the following is not included in the primary income component of the current account? A. Dividends from foreign investments B. Foreign workers’ remittances C. Interest payments from foreign bonds D. Wages earned abroad None 2. A country that imports more goods and services than it exports will likely have: A. A current account surplus B. A capital account surplus C. A current account deficit D. A balanced budget None 3. Secondary income includes which of the following? A. Profits from FDI B. Exports of goods C. Foreign aid and remittances D. Sale of government bonds None 4. If the value of exports of goods is $400B and imports of goods is $500B, what is the balance of trade in goods? A. $100B deficit B. $100B surplus C. $900B balance D. $0 None 5. One consequence of a prolonged current account deficit is: A. Reduction in foreign debt B. Currency appreciation C. Higher domestic demand D. Dependence on foreign capital None 6. An appreciation of a country’s currency tends to: A. Increase exports and decrease imports B. Decrease exports and increase imports C. Improve trade balance D. Cause inflation None 7. Which of the following is considered a credit item in the current account? A. Import of electronics B. Repatriation of profits by foreign firms C. A foreign student paying tuition fees domestically D. Buying foreign bonds None 8. The current account balance is calculated by summing: A. Imports and exports of goods only B. Trade in goods, trade in services, capital inflows C. Trade in goods, services, primary and secondary income D. Capital account and net errors None 9. A surplus in the current account may result in: A. Over-reliance on imports B. Increased unemployment C. Upward pressure on the domestic currency D. Structural trade deficits None 10. Which of these would most likely improve a current account deficit? A. Raising domestic interest rates B. Cutting government spending C. Increasing export competitiveness D. Encouraging more imports None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
