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CUET Economics 2025 PYQs21 May Shift 1. Free, no login required.

Macro

past year questions, CUET Economics 2025 21 May Shift 1

Balance of Payments

past year questions, Macro, CUET Economics 2025 21 May Shift 1

Medium

Which of the following items will be recorded in the capital account of the Balance of Payments account?

Solution

✅ Correct Option: 4

Option 1 -> Net investment income is recorded in the current account as it represents income flows from investments.

Option 2 -> Gifts, grants and remittances are current transfers recorded in the current account, not capital account.

Option 3 -> Net income from compensation of employees is recorded in the current account under income component.

Option 4 -> Offshore funds represent capital movements and financial flows between countries.

Hence, Option 4: Offshore funds -> Offshore funds involve the movement of financial capital across borders and are recorded in the capital/financial account of the Balance of Payments. The capital account records transactions involving capital transfers and acquisition/disposal of non-produced, non-financial assets, while the financial account records investment flows including foreign direct investment, portfolio investment, and other financial capital movements. Offshore funds fall under these capital/financial transactions, unlike the other options which are all current account items (income flows and current transfers). -> correct

Related questions:

2025: 29 May Shift 1

Which of the following international transactions are meant to bridge the gap in BOP

2023: 30 May Shift 1

Arrange the following statements in correct sequence relating to change in exchange.

(A) The Central Bank intervenes to purchase dollars rate between Dollars and Rupee in the foreign exchange market.

(B) The government sets the exchange rate above the equilibrium exchange rate.

(C) This will absorb the excess supply of dollars in the foreign exchange market.

(D) It will result in excess supply of dollars in the foreign exchange market.

Choose the correct answer from the options given below :

2025: 31 May Shift 1

The Reserve Bank sells foreign exchange when there is a deficit. This move of RBI is known by which of the following?

  1. Official reserve sale.
  2. Balance of payments deficit.
  3. Balance of payments surplus.
  4. Balance of trade.

2025: 28 May Shift 1

Match the following:

List -IList -II
(A) Direct Investment(I) Bilateral Loans
(B) Portfolio Investment(II) Equity Capital
(C) External Borrowing(III) Off Shore Funds
(D) External Assistance(IV) Short Term Debt

Which of the following combination is a correct match of the above?

  1. (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
  2. (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
  3. (A) - (II), (B) - (III), (C) - (IV), (D) - (I)
  4. (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

2022: 19 July Shift 2

The likely impact on the Balance of payment position of Countries facing a financial crisis would be :

2025: 27 May Shift 2

If we have to pay Rs 150 for 3 pounds, then the exchange rate is Rs........... per pound.

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