Imports & Exports, Balance of Payments

Contents

#1. What is a trade deficit?

When exports exceed imports

When trade is restricted

When there is a balance between imports and exports

When imports exceed exports

#2. What is the role of a customs duty in international trade?

To encourage free trade

To promote exports

To restrict imports

To eliminate trade barriers

#3. 6. What is the primary purpose of trade agreements?

- C) To facilitate international trade

- B) To promote protectionism

- D) To discourage exports

- A) To increase tariffs

#4. What is the significance of a trade surplus for a country?

Decreased employment opportunities

Increased debt

Lower economic growth

Accumulation of foreign exchange reserves

#5. What does the term "Imports" refer to in commerce?

Domestic production

Local consumption

Goods and services brought into a country

Goods and services sold to other countries

#6. The Official Reserve Account includes transactions related to:

Changes in official reserves

Foreign aid

Import and export of goods

Foreign direct investment

#7. Which organization facilitates negotiations and dispute resolution in international trade?

International Monetary Fund (IMF)

United Nations (UN)

World Health Organization (WHO)

World Trade Organization (WTO)

#8. What does the Financial Account in the Balance of Payments track?

Balance of trade

Investment flows

Foreign aid and grants

Goods and services trade

#9. The balance of trade is calculated as:

Exports + Imports

Exports x Imports

Imports - Exports

Exports - Imports

#10. What is the role of the International Monetary Fund (IMF) in trade?

Implementing trade barriers

Providing financial assistance to promote exports

Maintaining stable exchange rates

Facilitating negotiations between countries

#11. The term "Balance of Payments" includes:

Only trade in goods

Only imports

Trade in goods and services, plus financial transactions

Only exports

#12. A deficit in the Current Account can be offset by a surplus in the:

Financial Account

Capital Account

Trade Account

Official Reserve Account

#13. Which of the following accounts is a part of the Current Account in the Balance of Payments?

Financial Account

Official Reserve Account

Trade Balance

Capital Account

#14. Which factor is NOT a reason for a country to engage in international trade?

Specialization

Resource scarcity

Self-sufficiency

Comparative advantage

#15. Which of the following is an example of an import barrier?

Tariff

Free trade agreement

Tax break

Subsidy

#16. How does an increase in foreign exchange reserves impact the Balance of Payments?

It indicates a surplus

It has no effect

It results in a trade imbalance

It leads to a deficit

#17. What is the purpose of a trade embargo?

To restrict all trade with a particular country

To promote exports

To encourage free trade

To eliminate import tariffs

#18. A trade surplus occurs when:

Imports exceed exports

Exports exceed imports

There is no international trade

Both exports and imports are equal

#19. The Capital Account in the Balance of Payments includes transactions related to:

Financial assets and liabilities

Goods and services

Income and transfers

International reserves

#20. The term "Dumping" in trade refers to:

Transparent trade practices

Exporting goods below their cost of production

Excessive government intervention

High-quality exports

Finish

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