Question : If a country experiences a decrease in its foreign exchange reserves, it indicates:

Option 1: A surplus in the current account

Option 2: A deficit in the current account

Option 3: A surplus in the capital account

Option 4: A deficit in the capital account

Question : If a country receives more income from its foreign investments than it pays to foreign investors, it will have a:

Option 1: Current account surplus

Option 2: Current account deficit

Option 3: Capital account surplus

Option 4: Capital account deficit

Question : Which of the following is not a type of balance of payments surplus or deficit?

Option 1: Trade surplus or deficit

Option 2: Current account surplus or deficit

Option 3: Capital account surplus or deficit

Option 4: Service account surplus or deficit

Question : When a country's current account deficit increases, its capital account balance is likely to:

Option 1: Increase

Option 2: Decrease

Option 3: Remain unchanged

Option 4: It is not related to the current account deficit

Question : In the Balance of Payments, a credit entry represents:

Option 1: An inflow of foreign exchange

Option 2: An outflow of foreign exchange

Option 3: A surplus in the capital account

Option 4: A deficit in the financial account