MCQ for economy-3

Which of the following constitute the Capital Account, with reference to the Balance of Payments?

1. Special Drawing Rights

2. Private Remittances

3. Foreign Direct Investment

4. External Commercial Borrowings

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In the context of India, which of the following would lead to widening of current account deficit?

1. Reduction in export subsidy.

2. Increase in outbound tourism.

3. Increase in international crude oil prices.

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Which among the following is the best source to finance the current account deficit?

The Depreciation of currency can lead to

1. Gains for export oriented sectors

2. Increase in prices of imports

3. Inflation

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Which among the following constitute India’s foreign exchange reserves?

1. Foreign Currency Assets

2. Gold holdings of RBI

3. Special Drawing Rights

4. External Loans of the Government

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Which among the following is/are the effect of an appreciating domestic currency?

1. Increase in import

2. Increase in foreign investments in the country

3. Printing of new currency by the central bank

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Consider the following statements regarding agreements in trade:

1. An early-harvest deal comes to play when two countries find it difficult to arrive at a consensus regarding a comprehensive trade deal like PTA, FTA etc.

2. An mini-trade deal is a precursor to a comprehensive trade in which trading partners reduce tariff barriers on limited goods to promote trade.

Which of the statement given above is/are correct?

Which of the following purposes justify an early harvest deal in general?

1. It is signed to make an existing deal stronger between nations.

2. It is signed to transition to a stronger deal in future.

3. It is a precursor to a comprehensive trade deals like free trade agreement (FTA), comprehensive economic cooperation agreement (ceca) etc.

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Consider the following statements regarding European Union:

1. It is an example of Economic Union.

2. It is Monetary Union.

3. It is a Fiscal Union.

Which of the statements given above is/are correct?

Which of the following reasons can be attributed to India’s limited gains from Free Trade Agreements (FTA)?

1. India’s export to a country with which it has a FTA is similar to countries with which we do not have FTA.

2. India’s import from countries with which we have FTA is much more than countries with which we don’t have FTA.

3. India has trade deficit with most of the countries with which we have FTA.

4. India creates a big negative list which limits its benefits from FTAs.

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