1. Under the redistribution effect of tariff, the loss of consumer’s surplus is neither
transferable to the produces nor to the government and is called by Kindleberger as the
Correct : D. All of the above
2. Under the effects of a tariff under partial equilibrium analysis, the revenue effect is the
change in government receipts due to
Correct : C. Imposition of tariff
3. The increase in the domestic production of a commodity due to imposition of a tariff is
Correct : A. Protective or production
4. Import quotas may be fixed either in terms of quantity or
Correct : B. The value of the product
5. The physical limitation of quantities of different products to be imported from foreign
countries within a specified period of time is called
Correct : C. Import quota
6. Import quotas include
Correct : B. Tariff or custom quota
7. The effects of quota under partial equilibrium include
Correct : D. All of the above
8. When import quotas are fixed after negotiations between the importing and exporting
countries, it is known as
Correct : C. Bilateral quota
9. The objective of import quotas include
Correct : A. To protect domestic industries from foreign competition by restricting imports
10. Under the unilateral quota system, the autonomously fixed quota may either be
Correct : C. Global or allocated
11. A tariff or custom quota may either be
Correct : D. Autonomous or agreed
12. The system devised to administer the types of quotas is
Correct : B. Import licensing
13. The quota system in which domestic producers of a quota fixing country are required to make use of both domestic raw materials and a specified proportion of imported raw materials to produce a product
Correct : D. Mixing quota
14. Tariff can be levied upon
Correct : C. Both exports and imports
15. The tariffs or duties levied upon goods originating from abroad and scheduled for the
home country are
Correct : B. Import duties
16. High tariffs have the effect of restricting
Correct : A. The volume of international trade
17. A tariff or import duty which are a combination of the ad valorem and specific duty
Correct : D. Compound duty
18. On the basis of retaliation, tariffs can be of the types of
Correct : B. Retaliatory and countervailing tariffs
19. Once import quota is levied on a commodity, the domestic price of the commodity
Correct : D. Rises
20. An increase in domestic production of goods due to imposition of import quota is called
Correct : A. Protective or production effect
21. Which of the following items is not included in the invisible items of balance of
payments?
Correct : C. Export and import of goods
22. In balance of payments account, all goods exported and imported are recorded in
Correct : C. Current account
23. If a country has fundamental deficit in in the balance of payments, it should resort to
Correct : B. Devaluation of its currency
24. Capital account includes
Correct : D. All of the above
25. Balance of trade includes
Correct : A. Visible items
26. A country which gives loans and grants on a large scale to other countries has
Correct : B. A deficit in its BOP on capital account
27. ‘twin deficits’ refer to revenue deficit and
Correct : C. Current account BoP deficit
28. Measurement of deficit or surplus in the balance of payments in in international
transaction is in a given year is
Correct : A. Balance of payments
29. Overvaluation of domestic currency makes
Correct : A. Foreign goods cheaper and exports dearer in foreign countries
30. Devaluation encourage
Correct : A. Exports
31. A systematic record of receipts and payments in international transactions of a country in
a given year is called
Correct : B. Balance of payments
32. The most important items in the current account are
Correct : C. Merchandise exports and imports
33. Lending to foreign countries represents
Correct : B. Capital outflows
34. Payment to foreign country is a
Correct : B. Debit transaction
35. The category that do not includes in the balance of payments account is/are
Correct : D. The savings account
36. The expression (X-M) denotes
Correct : A. The balance of trade
37. If the difference between exports and imports is zero
Correct : A. Balance of trade balances
38. The current account BOP deficit will be beneficial for the economy if foreign borrowings
are used to finance
Correct : C. Real investment
39. In the equation Y=C+I+G+(X-M), G denotes
Correct : B. Government expenditure
40. If export is less than import, there is a ….. in balance of trade.
Correct : B. Deficit
41. In the equation B=Rf-Pf, Pf represents
Correct : B. Payments made to foreigners
42. The difference between exports and imports of a country is its
Correct : A. Balance of visible trade
43. Under direct control measures, the government aims at limiting
Correct : A. The volume of imports
44. Given the foreign exchange rate and prices in a country, an increase in the value of
exports causes an increase in
Correct : B. Incomes
45. Devaluation results in
Correct : A. Increase in domestic price of imports and decrease in foreign price of exports
46. Undervaluation of currency encourages
Correct : B. Exports
47. The equation Rf-Pf <0 denotes
Correct : B. Deficit in balance of payments
48. Imports in balance of payments account are shown as a
Correct : A. Negative item
49. Which of the following account does not included in the Reserve account?
Correct : D. Savings
50. Exchange rate depreciation reduces
Correct : A. The value of home currency in relation to foreign currency
51. By restricting imports through the quota system, the deficit is
Correct : A. Reduce
52. A deficit in BOP occurs when
Correct : B. Credit<debit
53. Fundamental disequilibrium is
Correct : C. A long-term nature
54. Deflation as a measure of correcting deficit in BOP tends to make
Correct : A. domestic goods relatively cheaper to foreign goods
55. in 1991, India devalued its currency by 18 per cent to
Correct : B. 20%
56. When government imposed tariffs, it results in improvement of
Correct : B. Balance of payments situation
57. Which of the following is not a type of disequilibrium in BOP?
Correct : D. Constant disequilibrium
58. Invisible exports and imports are the component of
Correct : A. Current account
59. Exports that are estimated on free on board (f.o.b.) basis signifies that
Correct : A. the transportation costs, costs of insurance etc. are not included
60. Imports that are estimated on carriage, insurance and freight (c.i.f.) basis signifies that
Correct : A. the transportation costs, costs of insurance and freight get included.
61. The Indian rupee was made a freely convertible currency on current account since the
year
Correct : C. 1994
62. Which of the following statements about the direction of India’s foreign trade is correct?
Correct : A. The share of Asia and ASEAN in total trade has increased significantly
63. NRI deposits are
Correct : A. Major source of capital inflows into India
64. India’s top import item is
Correct : D. Crude oil
65. India’s top export item is/are
Correct : A. Mineral, fuels, oils, etc
66. The most important item of import for India in terms of value is
Correct : B. POL
67. The biggest exporter of goods to India during 2018-190 is
Correct : C. China
68. The biggest trading partner of India is
Correct : C. China
69. Since the inception of planning era in 1951, India has been facing the problem of
Correct : C. Both (a) and (b
70. To make the exchange rate more realistic and to encourage exports and discourage
imports, the Rupee was devalued in
Correct : A. 1991
71. The trade deficit India experienced in 1990-91 was mainly due to
Correct : B. High growth rate of imports
72. The terms of trade measures
Correct : A. The terms of exchange between a unit of import and a unit of export
73. Under Liberalized Exchange Rate Management Scheme, how much is the receipts on current account could be converted freely into rupees at market determined exchange rate?
Correct : D. 60 %
74. Rupee was made convertible for all trade in merchandise in
Correct : C. March 1993
75. Rupee is non-convertible in
Correct : B. Capital account
76. Which of the following is not a part of capital account?
Correct : C. Transfer payments
77. The principal reasons for the sluggishness of exports during 1980s was
Correct : A. Domestic supply constraints
78. The overall exports of India (merchandise and service) during April-May 2019-20 are estimated to have a positive growth over the same period last year is
Correct : C. 4.32%
79. Which of the following is an export item/items that shows a positive growth in May
2019?
Correct : D. Drugs & Pharmaceutical
80. Which of the following an import item/items that shows a negative growth in May 2019?
Correct : A. Vegetable oils
81. As per the latest press release by the RBI dated 14th June, 2019, exports in April 2019
registered a positive growth of
Correct : A. 2.84%
82. As per the latest press release by the RBI dated 14th June, 2019, imports in April 2019
registered a positive growth of
Correct : C. 4.46 %
83. According to Exports data during 2011-12 (April-June), country with the largest importer of
Indian goods was
Correct : A. UAE
84. The widening of the Current Account Deficit during 2018-19 was on account
Correct : A. A higher trade deficit
85. India figures among the top ….global exporters and importers of services.
Correct : C. Ten
86. The top two countries that remain the top sources of FDI to India during 2017-19 are
Correct : A. Singapore and Mauritius
87. During the period of the first Five-Year Plan, India’s imports mainly consisted of
Correct : B. Foodgrains
88. The net terms of trade refers to
Correct : A. The ratio of unit value index of imports to unit value index of imports.
89. Foreign investment inflows help to mitigate the pressure on the overall
Correct : B. Balance of Payments
90. India’s foreign trade policy during the late 1950s was often termed as
Correct : B. Export pessimism
91. The full form of EXIM is
Correct : B. Export-Import
92. Which of the following manages and monitors India’s foreign exchange rate in order to
correct deficit in BoP?
Correct : A. The Reserve Bank of India
93. Under the Liberalized Exchange Rate Management System (LERMS), the rupee got a
partial convertibility in the ratio
Correct : C. 60:40
94. Which of the following is/are not the policy measure/measures to correct deficit in
Balance of Payments?
Correct : D. Issuing new currency
95. Gold imports had increased during 1992-99 due the repeal of the Gold Control Order in
Correct : B. 1991
96. Since 1950, India’s foreign trade has undergone important changes signifying that it has
entered into
Correct : C. Multilateral trade
97. The huge trade deficit India experienced during the 1980s was mainly due to
Correct : A. Slow growth of exports and fast rise in imports
98. The slow growth of exports during 2004-2007 was the result of
Correct : B. The appreciation of rupee against dollar
99. The BoP situation does not deteriorate so long as
Correct : C. The fiscal deficit is under control
100. During the period of 1950-51, the traditional exports like tea, jute and cotton textiles
formed