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Balance of Payments Quiz

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Questions and Answers

What does the balance of payment contain a classified record of?

Receipts and payments arising from goods exported, services rendered, and capital received (correct)

Only payments arising from services rendered

Only receipts arising from goods exported

Only capital received by residents in a country

What does the balance of payment not include?

Receipts arising from goods exported

Services rendered by non residents (correct)

Capital transferred to non residents

Payments made by residents on account of goods imported

What does the balance of payment record for a country?

Only goods exported and imported

Only capital received by residents in a country

All economic transactions between residents of the country and residents of foreign countries (correct)

Only services rendered by residents in a country

What is the period for which the balance of payments is usually prepared?

Three months or twelve months Signup and view all the answers

How are economic transactions recorded in the balance of payments?

According to double entry principle of book keeping Signup and view all the answers

What does a favorable or surplus position in the balance of payments indicate?

Total receipts from foreign countries exceed the total payments to foreign countries Signup and view all the answers

What does the balance of payments show about a country's position in foreign trade?

It indicates a country’s position in foreign trade Signup and view all the answers

What does the balance of payments include?

All receipts and payments both visible and invisible Signup and view all the answers

Study Notes

Balance of Payments

Classified record of a country's international transactions with the rest of the world
Records all transactions between a country's residents and non-residents

Exclusions

Does not include transactions between residents

Country's Record

Records credits and debits of a country's international transactions
Includes transactions related to goods, services, income, and financial claims

Period

Usually prepared for a year or a quarter

Transaction Recording

Economic transactions recorded in the balance of payments using double-entry bookkeeping
Debits represent outflows ofgoods, services, and income
Credits represent inflows of goods, services, and income

Favorable Position

A surplus or favorable position indicates that a country's exports exceed its imports
Indicates a country's foreign exchange earnings are higher than its foreign exchange payments

Country's Position in Foreign Trade

Shows a country's performance in foreign trade, including its competitiveness and trade balance
Reveals whether a country is a creditor or debtor nation

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Description

Test your knowledge of international economics with this quiz on balance of payments. Challenge yourself with questions about economic transactions between residents of different countries, receipts and payments for goods and services, and capital received and paid.