Macro

Balance of Payments

Medium

The current account is the record of trade in goods and services and transfer payments. Arrange the following components in terms of service.

(A). Current account.

(B). Net factor income + Net Non-factor income.

(C). Net investment income + Net income from compensation of employees.

(D). Trade in services.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(A), (D), (B), (C)

✅ Correct Option: 4

(A), (D), (B), (C) -> This represents the correct hierarchical arrangement from broadest to most specific. (A) Current account is the overall category that encompasses all international transactions. (D) Trade in services is a major component within the current account. (B) Net factor income + Net Non-factor income represents the income flows within the current account. (C) Net investment income + Net income from compensation of employees is the detailed breakdown of net factor income, being the most specific level. This logical progression moves from the comprehensive current account framework down to its most granular service-related components. -> correct

2023: 11 June Shift 3

A __________ account deficit is financed by net capital flows from the rest of the world, thus by a capital account surplus.

2025: 28 May Shift 1

Match the following:

List -I	List -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?

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
(A) - (II), (B) - (III), (C) - (IV), (D) - (I)
(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

2025: 3 June Shift 1

Under a flexible exchange rate, when the price of domestic currency in terms of foreign currency increases is called?

2026: 15 May Shift 1

Match the LIST-I with LIST-II

LIST-I	LIST-II
A. Third element of BOP	I. Dirty floating
B. Managed Floating	II. Depreciation of domestic currency
C. When the government makes domestic currency cheaper	III. Errors and omissions
D. When the price of foreign currency in terms of domestic currency has increased	IV. Devaluation

Choose the correct answer from the options given below:

2024: 16 May

Arrange the following elements in correct chronological sequence (earliest to latest) :

2025: 2 June Shift 1

Identify the correct reasons that may affect the demand for foreign exchange in an economy.

(A) Import of visibles.

(B) Export of invisibles.

(D) Purchase of assets abroad.

Choose the correct answer from the options given below:

Solution

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