Macro

Balance of Payments

Easy

More foreign currency will flow into the home country when :

When people of home country want to send gifts abroad

When people of home country want to purchase financial assets abroad

Imports increase

Exports increase

✅ Correct Option: 4

Foreign currency flows INTO a country when foreigners pay for goods/services/assets purchased from the home country. Exports bring foreign currency in as foreigners pay for domestically produced goods. Gifts sent abroad, purchasing foreign financial assets, and imports all cause foreign currency to flow OUT, not in.

2025: 29 May Shift 2

In the balance of payments, the transactions of bonds and equity shares are placed under which of the following account?

2022: 10 Aug Shift 2

Raising the value of country's currency under fixed exchange rate system is :

2026: 21 May Shift 2

When the country purchase the goods and services from rest of the world, this is called:

2026: 13 May Shift 2

The country could use its reserves of foreign exchange in order to balance any deficit in its balance of payments. The reserve bank sells foreign exchange when there is a deficit is called ?

2025: 22 May Shift 2

The balance of payments records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period. Identify the main accounts in the balance of payments.

2026: 19 May Shift 2

Which one of the following represents the dirty floating exchange rate system?

More foreign currency will flow into the home country when :

Solution

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