Select the third element of BOP other than current and capital accounts.

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.

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An increase in exchange rate implies that the price of foreign currency in terms of domestic currency has increased; this is called ........

What could persistent current account deficit lead to?

When transactions are made due to some reason other than to bridge the gap in the balance of payments, that is, when they are independent of the state of BoP then such international economic transactions are called as..........................

When income increases, consumer spending increases. Spending on imported goods is also likely to __________.

1. Decrease.
2. Constant.
3. Increase.
4. Maybe an increase or maybe decrease.

Suppose that government bonds in country A pay 8 per cent rate of interest whereas equally safe bonds in country B yield 10 per cent. The interest rate differential is 2 per cent. Arrange the consequences of the same in sequential order.

(A) People will find investing in country B more attractive and will therefore demand less of country A's currency.

(B) Depreciation of country A's currency and an appreciation of country B's currency.

(C) Investors from country A will be attracted by the high interest rates in country B and will buy the currency of country B selling currency of country A.

(D) The demand curve for country A's currency will shift to the left and the supply curve will shift to the right.

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