Policies to Correct Disequilibrium in the Balance of Payments Quiz by Shubhrata Shrestha | Jul 7, 2025 | 0 comments Policies to Correct Disequilibrium in the Balance of Payments Quiz Q1. Which of the following is not part of the current account? A. Trade in services B. Foreign aid received C. Portfolio investment D. Income from abroad None Q2. A rise in interest rates would most likely: A. Encourage imports B. Lower the value of domestic currency C. Attract foreign capital inflows D. Increase government spending None Q3. What is the main goal of protectionist policies in BoP correction? A. Increase government revenue B. Reduce exports C. Encourage foreign investment D. Decrease imports None Q4. The capital account includes: A. Direct foreign investment B. Transfer of non-produced assets C. Remittances from abroad D. Export of services None Q5. Which of the following is an expenditure-reducing policy? A. Devaluation B. Tariffs on imports C. Increase in income tax D. Subsidy to exporters None Q6. A depreciation in the exchange rate is likely to: A. Make exports more expensive B. Improve the current account C. Reduce the capital account D. Cause deflation None Q7. What does the financial account record? A. Aid payments B. Tourism receipts C. Purchase of bonds and shares D. Import duties None Q8. Which policy best improves long-term export competitiveness? A. Supply-side policy B. Fiscal austerity C. Tariff imposition D. Currency appreciation None Q9. What is a likely result of using devaluation as a BoP correction tool? A. Reduced inflation B. Cheaper imports C. Higher import prices D. Lower export volume None Q10. Expenditure-switching policies aim to: A. Cut interest rates B. Boost overall consumption C. Redirect demand from imports to domestic goods D. Increase savings rates None Time's up Submit a Comment Cancel replyYour email address will not be published.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
