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Duplicate of Y10 Revision on Balance of Payments Flashcards | StudBud
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Duplicate of Y10 Revision on Balance of Payments
Duplicate of Y10 Revision on Balance of Payments
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Basics of balance of payments for AICE Economics AS Level
Flashcards
23 cards
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Questions
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Answers
1
Devaluing your country's currency makes
exports more expensive
export and imports more expensive
imports more expensive
exports and imports cheaper
2
A CONDITION wherein a current account deficit is offset by a capital account surplus.
balance of payments disequilibirum
balance of payments equilibrium
3
A country can use a ___________to reduce imports and fix a BOP or trade deficit
Transfer
Tarrif
Subsidy
quota
4
Which one is NOT an example of a current account debit item?
Art collectors buying priceless art pieces from London auctions
Local agencies monitoring inflow of goods from the borders
Locals on holiday abroad
Private local firms hiring foreign consultants
5
What should a country do with its interest rate to resolve financial account deficits?
keep them the same
Raise them
Lower them
6
raising interest rates helps fix BOP deficits by
selling more exports
making things cheaper
attracting foreign capital
causing domestic capital to flee
7
Which of the given is NOT a debit item in the US current account?
Silicon valley firms getting top coders from Asia
American products using imported spare parts
Asian students studying in ivy league universities
Outsourcing parts of its services to companies based in other countries.
8
Which one is not part of the current account?
trade in merchandise
income receipts
trade in services
capital transfers
9
People with money to lend (investors) like to invest their money where the interest rate is?
high
low
10
Which one is NOT a benefit of export subsidies?
domestic producers have more job security
domestic producers earn higher wages
taxpayer funds used to pay for the subsidy
foreign consumers pay lower prices buy more exports
11
Which is not a consequence of BOP disequilibrium?
reduction in foreign direct investment
fewer stocks of imported goods on shelves
domestic unemployment
reduction of tariffs and quotas
12
A relatively higher interest rate can attract foreign ______________ and help fix a BOP deficit
language
investment
currency
film
13
When persistent deficits or surpluses in balance of payments occur
BOP disequilibrium
BOP equilibrium
14
Which is NOT an example of expenditure dampening policy
deflationary monetary policy
tariffs
raising interest rates and reducing money supply
deflationary fiscal policy
15
Limiting the amount of foreign currency in the hands of citizens to reduce imports
tax
tariff
quota
exchange controls
16
Which is NOT a cause of balance of payment disequilibrium?
political or economic instability
fewer stocks of domestic goods on shelves
short-term economic boom, more goods imported
high propensity to import goods
17
One way for a country to facilitate the flow of incomes earned by citizens abroad would be to___.
Tax all bank transfers from abroad
Monitor closely and restrict online financial transactions
Facilitate online bank transfers
Restrict banking hours
18
When the government gives money to domestic producers to encourage more exports
tariff
import tax
quota
export subsidy
19
An accounting of a country's international transactions for a particular time period
balance of payments
current account
capital account
Terms of trade
20
a tax on imports
quota
exchange control
export subsidye
tariff
21
It is a measure the flow of GOODS and SERVICES into and out of a particular country
capital account
main account
current account
financial account
22
By making exports cheaper and imports more expensive, a BOP or trade deficit will
shrink or even be resolved
explode and get out of control
be ignored completely
get bigger and cause more problems
23
Any transaction that causes money to flow INTO a country
bonus
debit
appreciation
credit
