SSC CGL Economy – External Sector – BoP, Forex, Trade & International Institutions – Level 2 · Exam Level · Tier I Sprint

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SSC CGL Economy – External Sector – BoP, Forex, Trade & International Institutions – Level 2 · Exam Level · Tier I Sprint – 16 questions, subject: Indian Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Statement-basedWhich is/are correct?
I. The balance of trade includes trade in services.
II. The balance of payments always balances in accounting terms.

Correct Answer: C [Only II]

Explanation:

BoT covers only goods; the BoP balances through the change in reserves.

2.  
Match the followingMatch the World Bank Group institutions with their roles:
P. IFC Q. MIGA R. IDA S. ICSID
1. political-risk guarantees 2. soft loans to the poorest 3. investment disputes 4. private-sector investment

Correct Answer: B [P-4, Q-1, R-2, S-3]

Explanation:

IFC private sector; MIGA guarantees; IDA soft loans; ICSID disputes.

3.  
Assertion–Reason
A: Interest paid on external commercial borrowings is recorded in the current account.
R: Interest is income on an investment and creates no new claim.

Correct Answer: D [Both A and R are true and R explains A]

Explanation:

The loan is capital account, but the interest on it is primary income in the current account.

4.  
Odd one out

Correct Answer: A [External commercial borrowings]

Explanation:

ECB is capital account; the other three are current account.

5.  
The SDR basket currently has how many currencies?

Correct Answer: B [5]

Explanation:

Dollar, euro, renminbi, yen, pound (renminbi from 1 Oct 2016).

6.  
Which currency was added to the SDR basket from 1 October 2016?

Correct Answer: C [Chinese renminbi]

Explanation:

Renminbi (yuan) joined on 1 October 2016.

7.  
Who is the Director-General of the WTO (as on 15 October 2026)?

Correct Answer: A [Ngozi Okonjo-Iweala]

Explanation:

WTO DG since 1 March 2021; second term from 1 September 2025 (wto.org).

8.  
The WTO's 14th Ministerial Conference (MC14) was held in (as on 15 October 2026):

Correct Answer: D [Yaoundé, Cameroon]

Explanation:

MC14 concluded on 30 March 2026 in Yaoundé (PIB, 31 March 2026).

9.  
Imaginary BoP (US$ bn): exports 400, imports 600, net invisibles +170. The current account balance is:

Correct Answer: B [−30]

Explanation:

(400 − 600) + 170 = −30 → CAD $ 30 bn.

10.  
Imaginary: CAD $ 20 bn, net capital inflow $ 35 bn, errors and omissions $ 0. Forex reserves will:

Correct Answer: C [Rise by $ 15 bn]

Explanation:

Overall = −20 + 35 = +15 → reserves rise.

11.  
Chronological orderArrange in chronological order:
1. Current account convertibility 2. LERMS (dual exchange rate) 3. FEMA passed 4. Rupee devalued after the BoP crisis

Correct Answer: D [4, 2, 1, 3]

Explanation:

1991 devaluation → 1992 LERMS → 1994 convertibility → 1999 FEMA.

12.  
Fill in the blankA foreign investor holding ___ or more of the equity of a listed Indian company is treated as making FDI.

Correct Answer: A [10%]

Explanation:

Below 10% is portfolio investment (FPI).

13.  
True/False drillhow many are true?
(i) IMF and World Bank both have headquarters in Washington, D.C.
(ii) The WTO replaced GATT.
(iii) The rupee is fully convertible on the capital account.
(iv) IFC lends to the private sector.

Correct Answer: C [Three]

Explanation:

(iii) is false – capital account convertibility is only partial.

14.  
WTO agreement on intellectual property rights is called:

Correct Answer: A [TRIPS]

Explanation:

TRIPS – Trade-Related aspects of Intellectual Property Rights.

15.  
Under the WTO Agreement on Agriculture, trade-distorting domestic support that must be limited falls in the:

Correct Answer: D [Amber box]

Explanation:

Amber = distorting (limited); Green = minimal distortion; Blue = production-limiting programmes.

16.  
Reverse question'An export price index of 110 and an import price index of 100' gives terms of trade of:

Correct Answer: B [110]

Explanation:

Answer: 110. 110/100 × 100 = 110.

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