Macro

Balance of Payments

Easy

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

Sells, official reserve sale

Buy, BOP Deficit

Borrow, transfer payments

Buy, net factor income from abroad

✅ Correct Option: 1

When there is a BoP deficit, the demand for foreign exchange exceeds supply, so the central bank sells foreign exchange from its reserves to fill the gap. This transaction is called an official reserve sale.

2026: 13 May Shift 1

The difference between the value of exports and the value of imports of goods of a country in a given period of time is called?

2026: 15 May Shift 1

International economic transactions are called _______________ when transactions are made due to some reason other than to bridge the gap in balance of payments.

2025: 30 May Shift 1

What does capital account of BOP record?

2025: 3 June Shift 1

Chronologically arrange the following in sequence:

(A) Smithsonian Agreement.

(B) Gold standard system of exchange.

(D) Bretton woods conference.

Choose the correct answer from the options given below:

2022: 30 Aug Shift 2

Match List - I with List - II.

List - I (Concept)	List - II (Meaning)
(A) Trade surplus	(I) Excess of the payments for import of goods over the receipts for export of goods
(B) Devaluation of currency	(II) Excess of exports of goods over the imports of goods
(C) Trade deficit	(III) Fall in the external value of a domestic currency as notified by the government of the country
(D) Balance of trade	(IV) Difference between the value of exports and value of imports of goods of a country

Choose the correct answer from the options given below :

2026: 19 May Shift 2

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

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

Solution

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CUET Economics Past Year Questions (Topic-Wise)

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