HARD
Earn 100

Trade Deficit must exist if a country is facing a situation of Current Account Deficit’. Defend or refute the statement, with valid argument.

Important Questions on Open Economy Macroeconomics

HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Trade deficit is always a great cause of worry for an economy.
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
_____ is the difference between the value of exports and imports of goods.
HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Suppose C = 40 + 0.8Y D, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y (a) Find equilibrium income. (b) Find the net export balance at equilibrium income (c) What happens to equilibrium income and the net export balance when the government purchases increase from 40 and 50?
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
When receipts of foreign exchange are more than payments of foreign exchange, BOP is:
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Which of the following is a component of Balance of Payment?
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
If a country exports more goods than what it imports, than the balance of trade is said to be in _____ .
HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments

According to the following data, Balance of Trade would be:

Total exports of merchandise 1000 crore

Total imports of merchandise 1200 crore

Total exports of invisibles 200 crore

Total imports of invisibles 100 crore

HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Differentiate between the balance of trade and current account balance.
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Export and import of goods is also known as:
HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Should a current account deficit be a cause for alarm? Explain
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Balance of payments is a stock concept.
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Balance on ‘Balance of Trade’ can be:
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Balance of _____ is narrow concept as compared to balance of payment.
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Who out of the following is included in “Residents” in BOP transactions?
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Which transactions determine the Balance of Trade?
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Equilibrium in Balance of Payments is achieved when the net value of all the receipts and payments is _____ (zero/positive).
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Cotyledons are also called-
HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Suppose C = 100 + 0.75Y D, I = 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y . Calculate equilibrium income, the budget deficit or surplus and the trade deficit or surplus.
MEDIUM
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
What are official reserve transactions? Explain their importance in the balance of payments.
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Balance of Payments
Deficit in balance of trade indicates deficit in balance of payments also.