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Balance of Payments Quiz

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Balance of Payments Quiz

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Test your knowledge on deficits and policy tools.

Created by

Montex
Montex
Canada

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Balance of Payments Quiz
 

Balance of Payments QuizOnline version

Test your knowledge on deficits and policy tools.

by Montex
1

Devaluation increases the price of exports and reduces their demand, worsening the deficit.

2

A deficit on the balance of payments always means a country is economically failing in the long term.

3

A balance of payments deficit can lead to lower foreign exchange reserves and potential unemployment.

4

Deflationary monetary policy (raising interest rates) can help reduce a balance of payments deficit.

5

Import controls such as embargoes, quotas, and tariffs can shrink a deficit by reducing imports.

6

Deflationary policies always increase inflation, thereby worsening the deficit situation.

7

Increasing government spending immediately expands exports to fix a balance of payments deficit.

8

Devaluation lowers the value of a country's currency and can help reduce a deficit by reducing imports.

9

A surplus in the current account always guarantees a reduction in the overall balance of payments deficit.

10

A balance of payments deficit occurs when outflows exceed inflows.

 
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