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

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In accounting terms, the overall Balance of Payments always balances because:

A. current account equals capital account

B. exchange rates are fixed

C. it follows double-entry bookkeeping and official reserves adjust

D. exports always equal imports

Answer: Option C

Solution (By JKSSB Mock Tests)

The Balance of Payments always balances in accounting terms due to double-entry bookkeeping and reserve movements.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Currency Substitution' or 'Dollarisation' refers to:

A. The use of a foreign currency in parallel with or instead of the domestic currency

B. Only the use of gold coins

C. Only official dollarisation by law

D. The complete replacement of the domestic currency by a commodity standard

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Correct Answer: Option A

Explanation:
Currency substitution occurs when residents hold and use a foreign currency (often the US dollar) for transactions or as a store of value alongside or instead of the domestic currency.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Income Tax Return' in India is filed by individuals whose income exceeds:

A. Rs 5 lakh

B. Rs 1 lakh

C. Rs 10 lakh

D. the basic exemption limit

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Correct Answer: Option D

Explanation:
Individuals must file ITR if income exceeds the basic exemption limit.

This question belongs to: Economy GK Economy Set 1

Question #3

A demat account is used for:

A. holding shares in electronic form

B. holding foreign currency

C. banking transactions only

D. trading only in commodities

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Correct Answer: Option A

Explanation:
A demat account holds securities in electronic form.

This question belongs to: Economy GK Economy Set 1

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