Foreign trade - MCQs with answers
1. Which of the following is a part of capital account?a. Private capital
b. Banking capital
c. Official capital
d. All the above
View Answer / Hide AnswerANSWER: d. All the above
Capital account is classified into 3 parts in India- private, banking and official capital.
i. A double entry system of record of all economic transactions between the residents of a country and rest of the world is called balance of trade
ii. All transactions related to goods, services or income are classified as capital account.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: d. none
A double entry system of record of all economic transactions between the residents of a country and rest of the world is called balance of payments. All transactions related to goods, services or income are classified as current account.
a. FDI
b. FII
c. Balance of payment
d. SDR
View Answer / Hide AnswerANSWER: a. FDI
The investment in productive assets and participation in management as stake holders in business enterprises is foreign direct investment.
a. FDI
b. FII
c. Balance of payment
d. SDR
View Answer / Hide AnswerANSWER: b. FII
The portfolio investment by foreign institutional investors is called foreign institutional investment.
i. India adopted LERMS in 1992
ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: c. both
Liberalized Exchange Rate Management System was a dual exchange rate system in which 40% of forex earnings were converted at official exchange rate and 60% at market determined exchange rate.
