QUESTIONS BANK

1) On the basis of the size and composition of external debt, world bank has classified India as a :-

A. Heavily indebted country

B. Moderate indebted country
C. Less indebted country
D. Severely indebted country

2) The balance of payments of a country on current account is equal to

A. Balance of trade plus short term

B. Balance of trade plus net invisible exports
C. Balance of payment minus capital flows
D. Balance of invisible trade plus imports
3)  'De-coupling' denotes.

A. Indian market may be cut off from global markets so that it may be affected by global volatility.
B. Separating the birds affected by bird flue.
C. That markets are independent.
D. None of the above.

4)  NAFTA is an example of

A. Common Market
B. Customers Union
C. Economic Community
D. Free Trade Area

5) Which one is not an international organization

A. SAARC
B. ASEM
C. ASEAN
D. CBDT

6) The main objective of International Monetary Fund (IMF) was to

A. Promote International trade

B. Help economically backward countries
C. Maintain stable exchange rates
D. Promote international liquidity

7) Which of the following is not an International Financial Institution

A. ICICI
B. IMF
C. IDA
D. World Bank

8) The gains from two nations depend on

A. Domestic barter rates

B. Different in the domestic barter rates of the two countries
C. Terms of trade
D. Degree of absolute advantage.

9) Interest payments on loans borrowed abroad are recorded in

A. Capital Account
B. Current Accounts
C. Errors and Omission Section
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 D. Official Reserve Account

10)  In balance of payment accounts, all goods exported and imported are recorded in

A. Capital account
B. Visible Accounts
C. Invisible Account
D. Merchandise Accounts

11) Which of the country's banking have been brought under 'Sanctions by USA, recently"?

A. Iraq
B. North Korea
C. Pakistan
D. Iran

12) Out of the following, one is not related with WTO

A. TRIPS
B. Ministerial Conference
C. TRIMS
D. TRAI

13) The balance of payments account is conventionally divided into

A. Current Account and Capital Account

B. Visible Account and Invisible Account
C. Long-term capital Account and short term capital account
D. None of the above

14) How many member countries are their in the 'World Customs Organisation'?

A. 160
B. 162
C. 172
D. 180

15) The World Bank is known as

A. IMF

B. IDA

C.IBRD

D. Both (b) & (c)

16) Which one is not the form of FDI

A. Purchase of existing assets in foreign currency.

New Investment in Property, planet and equipment.
B. Making investment is the mutual funds
C. Transfer of many type of asset

17)  Which one is not on objective of IMF?

A. To promote international monetary cooperations

B. To ensure balanced international trade
C. To finance productive efforts according to peace time requirements
D. To ensure exchange rate stability

18)  A letter of credits means

A. A bank agreeing to accept and pay on due date

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 B. A letter containing conditions of credit purchase or sale
C. A letter sent by exporter to importer sanctioning credit dial.
D. A letter sent by importer to exporter sanctioning credit deal

19)  The international monetary fund has estimated India's contribution to world gross domestic product in
purchasing power parity (PPP) terms for 2011.

A. 4.6 percent
B. 6.4 percent
C. 7.1 percent
D. 8.9 percent

19) The 21st member to join the G-20 is

A. Sri Lanka
B. Uzbekistan
C. Myanmar
D. Urugway
20)  Which of the following is a discontent of the of the title of sale of goods

A. certificate of origin
B. Letter of credit
C. Bill of lending
D. Bill of entry

21) International liquidity comprise which four of the following

A. Gold held by Central bank

B. Dollar reserves of countries other than the U.S.A
C. Updated flawless softwares
D. Stringent Legal frame-work

22)  The comparative cost theory of International trade was developed by

A. David Ricards
B. Haberlar
C. Adam Smith
D. Allfred Marshall.

23) The double Taxation Avoidance convention (DTAC) part was signed between

A. India and China

B. India, Serbia and Montenegro
C. Australia and china
D. None of the above.

24) Which one is called Bretton-wood Twin's

A. IBRD and IDA

B. IMF and IFL
C. IMF and IBRD
D. IDA and IFL

25)   The trade theory of absolute advantage was developed by

A. Haberler
B. David Ricardo
C. Adam Smith
D. Allfred Marshall

26) When custom duty is levied according to weight of goods it is known as

A. Excise duty
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 B. Ad-valorem duty
C. Revenue duty
D. Specific duty

27)  International trade theory was the contribution of

A. Bertie Ohlin
B. Arthur Okum
Adam smith
C. None of the above

28) Which one is the source of external finance?

A. WTO funds
B. World bank group
C. Export credit
D. Foreign direct investment

29) Foreign Exchange and Foreign currencies in India are governed by

A. RBI
B. Banking Regulation Act
C. FEMA Act
D. SEBI Act

30)   If a country has deficit in balance of current account balance of capital account will be

A. Zero
B. Surplus
C. Deficit
D. None of the above

31) Physical delivery of foreign exchange has to lake place in case of

A. Forward Market
B. Spot market
C. Future market
D. Options market

32) EPCG denotes

A. Export potential and credit Guarantee

B. Earning promotion and credit guarantee
C. Export promotion and credit guarantee
D. Export potential and credit goods.
33)  Which institution is known as the 'soft loan window' of World Bank
A. IMF
B. IFC
C. IDA
D. None of these

34) Which of the following is the basic objective of the World Bank?

A. To provide social services

B. To provide financial assistance
C. To promote economic growth
D. To eradicate poverty
35)  "Happiness Index" or "Happy Planet Index" has been envolved jointly by the "New Economic
Foundation" and "Firends of Earth", Both are located in

A. UK
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 B. USA
C. Australia
D. Europe

36)  The amount of gold, reserve curriencies and special drawing rights available for the finance of international
trade is known as

A. International liquidity
B. Special Drawing Right
C. International Monetary Fund
D. None of the above

37)  What one of the following is not the advantage of MNCs to the host country?

A. Increase in social activities

B. increase in economic activities
C. Utilisation of natural resource
D. R&D efforts enhanced.

38) IMF raised the quota and voting share of India which places India at the __ place among 184 members of the
organization

A. 10th
B. 11th
C. 12th
D. 13th

39)   UNCTAD Stands for

A. United nations committee on Tariff and Development

B. United nations conference on trade and deficit
C. United nations conference on trade and development
D. Union of nations cause for trade and development

40) Which of the following is not a mode of foreign capital inflow to India?

A. FBI
B. FII
C. NRI accounts
D. None of these

41)   In which aspect does the IMF act as the guardian of a code set up by its articles?

A. Regulatory
B. Consultative
C. Financial
D. Functional

42) Members of IMF are free to choose the form of exchange arrangements that they intend to apply subject to 

A. Their obligations to the Fund

B. The Fund's surveillance of their exchange rate policies.
C. Both (A) and (B)
D. Directive principles of the IMF.

43) The international monetory system introduced by Bretton Woods rested on

A. The maintenance of stable exchange rates

B. A multilateral credit mechanism institutionalized in the IMF
C. The principle of gold standard
D. Both (A) and (B)

44)  Which of the following is a function of WTO?

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 A. To facilitate the implementation of Multilateral Trade Agreement
B. To administer the Trade Review Mechanism
C. To administer the understanding on rules and procedures governing the settlement of disputes.
D. All of the above

45) If a country differs from the rest of the world n taste patterns but not in production capabilities, trade will
lead to some international specialisation in

A. Consumption
B. Production
C. Exports
D. Imports

46)   The income terms of trade indicates a nation's capacity

A. To import
B. To export
C. To improve its trade
D. None of the above

47)  The current account of balance of payments includes

A. Merchandise exports
B. Merchandise imports
C. Invisible exports and imports
D. All of the above

48) The payment of interest on loans and dividend payments are recorded in the

A. Unilateral transfer account

B. Official settlements account
C. Capital account
D. Current  account

49) Where do the members allow full freedom of factor flows among themselves, in addition to having a free-
trade area?

A. Free economic zone

B. Customs-union
C. Common market
D. Economic-union

50)  A case of international price discrimination in which an exporting firm sells at a lower price in a foreign
market than it charges in other markets, is known as

A. Dumping
B. Non-Dumping
C. Anti-Dumping
D. None of the above

51) Adjustment assistance is preferable to preventing import competition with trade barriers, if the
displacement costs of the free trade are

A. Equal to efficiency gains

B. Less than efficiency gains
C. More than efficiency gains
D. None of the above

52) Bilateral arrangements instituted to restrain the rapid growth of exports of specific manufactured goods, are
called

A. Administered protection
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 B. Voluntary export restraints
C. Imposed export restraints
D. None of the above

53) If a commodity X is subject to an import duty of 25% ad valorem, the nominal tariff is

A. 50%
B. 25%
C. 12.5%
D. 2.5%

54) An IMF member may purchase up to the full amount of its reserve tranche anytime

A. Without any condition

B. Subject only to the requirement of balance of payments need
C. Subject only to the requirements of development
D. None of the above

55)  Which of the following are included in the permanent facility for specific purpose of IMF?

A. The compensatory and contingency financing facility

B. The buffer stock financing facility
C. The extended facility
D. All of the above

56) India is not associated with

A. SAARC
B. NAFTA
C. BRICS
D. None of these

57) According to the credit tranche policy of the IMF, credit is made available in

A. Five tranches, each equivalent to 20% of country's quota

B. Four tranches, each equivalent to 25% of country's quota
C. Ten tranches, each equivalent to 10% of country's SDRs
D. Four tranches, each equivalent to 25% of country's SDRs

58)  Which one is not international Institution?

A. IMF
B. IDA
C. IBRD
D. TRAI

59) The Uruguay Round Agreement deal with subsidies which are

A. Prohibited subsidies
B. Actionable subsidies
C. Non-Actionable subsidies
D. All of the above

60) Under which system of valuation, SDRs were valued in terms of 16 currencies, which were assigned specific
weights?

A. Standard basket valuation

B. Standard charted valuation
C. Various currencies valuation
D. None of the above

61) A tariff fails to restrict imports when the demand for imports is

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 A. Perfectly price elastic
B. Price inelastic
C. Of unitary price elasticity
D. None of the above

62)  Which barrier can be used against recession induced exports into the country?

A. Quotas
B. Voluntary export restraints
C. Tariff
D. All of the above

63)  The value of SDR tends to be more stable than that of any single currency in the "Standard basket valuation"
because

A. It is internationally accepted measure

B. It is a weighted average of the exchange rates of the five major currencies.
C. Both (A) and (B)
D. It is an imaginary currency.
64) Factor Endownment Theory of International Trade was propounded by
A. David Ricardo
B. Bertil-Ohlin
C. J. S. Mill
D. C.P. Kindleberges

65) Balance of Payment can be made favourable if

A. Exports are increased
B. Imports are increased
C. Devaluation of money
D. (A) and (C)

66) Which facility was established to provide assistance to members facing payments difficulties that are large
in relation to their economies and their fund quotas?

A. Supplementary Financing Facility (SFF)

B. Compensatory and Contingency Financing Facility (CCFF)
C. Extended Fund Facility (EFF)
D. Bufferstock Financing Facility (BFF)

67) Quotas of all IMF members are reviewed at intervals of

A. Five years
B. Not more than five years
C. Three years
D. Two years

68) Which of the following is the best example of Agreement between Oligopolists

A. GATT
B. OPEC
C. WTO
D. UNIDO

69) Which type of subsidies are provided to industrial research and pro competitive development activity in
disadvantaged regions?

A. Prohibited subsidies
B. Actionable subsidies
C. Non-actionable subsidies
D. None of the above
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70) The comparative cost Advantage theory was given by

A. David Ricardo
B. Adam smith
C. Raymond Vernon
D. Michael E. Parter

71) Which of the following is true about the Board of Governors of IMF?

A. They meet once a year

B. They may vote by mail at other times except the annual meeting
C. Both (A) and (B)
D. They are elected annually
72) Which one of the following is true statement

A. A balance of trade deals with export and import of invisible items only
B. A balance of payment deals with both visible and invisible items.
C. The current account is not a component of balance of payment
D. All of the above

73) In India --- has a predominant share in the debt market.

A. Government Securities
B. Corporate Deposits
C. Corporate Equity
D. Global Depository Receipts

74) Which of the following is the criteria for approving an IDA credit?

A. Poverty test
B. Performance test
C. Project test
D. All of the above

75)  A country making use of the resources of the IMF is generally required to carry out an economic policy
programme aimed at achieving a viable balance of payments positions over an appropriate period of time, which
is known as

A. Rationality
B. Conditionality
C. Relativity
D. Flexibility