In accounting terms, the overall Balance of Payments always balances because: MCQ with Answer and Explanation

In accounting terms, the overall Balance of Payments always balances because:
A. current account equals capital account
B. exchange rates are fixed
C. exports always equal imports
D. it follows double-entry bookkeeping and official reserves adjust
Answer: Option D
Solution (By JKSSB Mock Tests)
The Balance of Payments always balances in accounting terms due to double-entry bookkeeping and reserve movements.

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Economy Set 1 Questions

Question #1
In the context of behavioural finance, the 'Disposition Effect' refers to:
A. The tendency of investors to sell winning investments too early and hold losing investments too long
B. Perfectly rational realisation of gains and losses
C. The tendency to sell losers and hold winners
D. Only the effect of taxes on trading

Correct Answer: Option A


Explanation:
The disposition effect is the empirical regularity that investors are more likely to realise gains than losses, consistent with prospect-theory value functions and the reluctance to admit mistakes.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' on cheese is:
A. 18%
B. 5%
C. 28%
D. 12%

Correct Answer: Option D


Explanation:
Cheese attracts 12% GST.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of economic theory, the 'Production Possibility Frontier' shifts outward when there is:
A. Unemployment of resources
B. Inefficient allocation of resources
C. Economic growth due to increase in resources or technology
D. Decrease in the labour force

Correct Answer: Option C


Explanation:
An outward shift of the PPF indicates economic growth, which can result from an increase in the quantity or quality of resources or from technological progress.

This question belongs to: Economy GK Economy Set 1