1. Which one of the following represents capital account convertibility of a currency?

2. The balance of payments of a country is in equilibrium when the

3. Which one of the following pairs is correctly matched?

4. A tariff will not have any effect on revenue if the duty imposed is

5. Dusenberry was of the opinion that less developed countries will have serious and adverse effect on their balance of payments due to

6. Assertion (A): The gains from trade are determined by the terms of trade.
Reason (R): The gains from trade depend on the differences in comparative cost ratios.

7. The tariff which maximises a country's economic welfare is called

8. Consider the following assumptions :
1. Perfect competition
2. Perfect mobility of factors between countries
3. Constant returns to scale Which of the above assumptions are associated with Ricardo's Theory of Comparative Costs?

9. Consider the following statements: Foreign indirect investment includes
1. Global Depository Receipts and Foreign Currency Convertible Bonds.
2. Foreign Institutional Investment.
3. Non-resident External Deposits.
4. Investment of a Multinational company in a domestic power project. Of these statements:

10. Which of the following items may be included in the Current Account part of the Balance of Payments Statements?

1. Merchandise exports.
2. Foreign tourist's expenditure in home country.
3. Foreign Short-term investment in home country.
4. Banking, insurance and transport services.(br>5. Income received on investments abroad.
Select the correct answer using the codes given below:

11. If the price elasticity of demand for exports is zero, then exports in local currency will

12. An import tariff in a labour surplus economy distributes income in favour of

13. According to the elasticity approach, for a devaluation to have a positive effect on a country's trade balance, the sum of the elasticities of demand for a country's exports and of its demand for imports has to be equal to

14. Consider the following statements:
I. the offer-curve is a straight line.
1. high tariff rates can improve terms of trade.
2. low tariff rates can improve terms of trade.
3. absence of tariff can improve terms of trade. Of these statements:

15. The main objective of the World Trade Organization is to secure among others

16. Which one of the following pairs is NOT correctly matched?

17. Consider the following statements: Under the gold-standard inflow of gold from the deficit to the surplus nation results in
1. a fall in the interest rate in the surplus nation.
2. a fall in the interest rate in the deficit nation.
3. an outflow of capital from surplus to deficit nation.
4. an outflow of capital from deficit to surplus nation. Of the above statements:

18. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II (Assumption) (Implication) (a) No transport costs 1. Commodity prices same in trade in the two countries (b) Perfect competition 2. Optimal allocation of in factor markets factors (c) Factor intensities 3. Techniques of producdiffer between tion same in the two goods goods (d) Production functions 4. Techniques of producsame in both tion same in the two countries countries Codes: (a) (b) (c) (d)

19. Which one of the following transactions represents a credit entry in the current account of a country's balance of payments?

20. Which of the following statements is not correct in respect of the balance of payments of a country?

21. Which one of the following pairs is not correctly matched.

22. Dumping aims at flooding a foreign country with

23. For the Heckscher-Ohlin theory of trade to be valid, the relative factor endowments of two countries should be

24. The automatic borrowing rights of a member of IMF are determined by

25. Which one of the following pair is not correctly matched?