Macro

Balance of Payments

Medium

Which one of the following statements is correct about the balance of payment (BOP)?

The Reserve bank buys foreign exchange when there is a deficit.

Accommodating transactions are made to bridge the gap between the BOP transactions.

The country can use its gold reserves to balance the surplus in BOP.

Autonomous transactions are dependent on the state of BOP.

✅ Correct Option: 2

Accommodating (below the line) transactions, such as official reserve movements, are undertaken precisely to bridge the gap left by autonomous transactions in the BOP, so option 2 is correct.

The RBI sells foreign exchange during a deficit (not buys), gold reserves are used to settle a deficit (not a surplus), and autonomous transactions are made independently of the state of the BOP.

2025: 14 May Shift 1

Which of the following are called 'above the line' in the balance of payments?

International Transactions
Errors and Omissions
Accommodating Transactions
Autonomous Transactions

2025: 30 May Shift 2

In modern economies, countries interact through various channels, Which market is not an example of these linkages?

2025: 13 May Shift 2

When the central bank intervenes to control the exchange rate through sell/purchase of foreign currencies, this process is called______

2025: 29 May Shift 2

If ₹150 is required to buy 2 Dollar, instead of ₹100 earlier, then:

(A) Domestic currency has depreciated.

(B) Domestic currency has appreciated.

(D) Selling foreign exchange from its reserves by the reserve bank of India.

Choose the correct answer from the options given below:

2023: 20 June Shift 1

Exchange Rate is the price of a currency expressed in terms of.

2026: 6 June Shift 1

The price of one currency in terms of another currency is called?

Which one of the following statements is correct about the balance of payment (BOP)?

Solution

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