Which of these does Dani Rodrik point out?
Correct answer D. Globalisation increases job insecurity
Topic / 19 questions
Balance of Payments, Aid and Foreign Investment MCQs
Balance of Payments, Aid and Foreign Investment MCQs cover how countries record international transactions and how foreign aid and multinational investment affect developing economies. They help development economics students and CSS, PMS and lecturer test candidates. Every question shows its correct answer instantly, so you can check key concepts as you practise.
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Which statement about OECD aid is NOT true?
Correct answer A. OECD aid increased from $6.9 billion in 1970 to $8.9 billion in 2001
Japan’s foreign aid programme has historically been characterised by which of the following?
Correct answer C. A strong bias towards Asian recipients
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Official development assistance (ODA) includes which of the following: I. development grants, II. loans with at least a 25 per cent grant element, III. military assistance, IV. technical cooperation?
Correct answer B. I, II and IV only
The equation I = S + F shows that a country can increase its new capital formation (investment) through which sources?
Correct answer B. Own domestic savings and by inflows of capital from abroad
What is the annual summary of a country’s international economic and financial transactions called?
Correct answer C. The international balance of payments statements
Chenery and Strout identified development stages in which growth is limited by the most binding constraint. These constraints are: I. the skill limit, II. the savings gap, III. the fiscal gap, IV. the foreign exchange gap. Which are correct?
Correct answer B. I, II and IV
Barro and Lee find that, other things being equal, what effect does IMF lending have?
Correct answer B. No effect on economic growth during the same five-year period but a significantly negative effect on growth in the next five years
What is the IMF responsible for providing?
Correct answer B. Short-term credit for international balance of payments deficits
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Which statement describes portfolio investment?
Correct answer D. Investors have no control over operations
Columbia’s Jagdish Bhagwati criticises US administrations for failing to distinguish between the benefits of free trade and what?
Correct answer B. The dangers of free capital movements for LDCs with poorly developed financial institutions
Which items are included in a country’s balance on current account?
Correct answer D. Goods, services and unilateral transfers
What is bilateral aid?
Correct answer D. Aid given directly by one country to another
Which of the following is commonly cited as a benefit that MNCs can bring to a developing country?
Correct answer B. Helping to finance a savings gap or balance of payments deficit
Critics argue that MNCs harm developing countries because they: I. increase technological dependence on foreign sources; II. hamper local entrepreneurship and infant industries; III. raise unemployment through unsuitable technology; IV. restrict subsidiary exports that undercut the parent. Which are cited?
Correct answer C. All of I, II, III and IV
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How do Carmen Reinhart and Kenneth Rogoff explain the paradox of capital flowing from poor to rich countries?
Correct answer C. The role of political and credit-market risk in many LDCs
Why did real US food aid, along with food reserves, fall between the 1960s and the 1980s?
Correct answer C. U.S farm interests wanted to reduce surplus grain stocks
According to Harvard’s Dani Rodrik, what does globalisation involve?
Correct answer A. The increasing international integration of markets for goods services and capital
Which statement about total US official development assistance to developing countries is correct?
Correct answer D. None of the above statements is true
About Balance of Payments, Aid and Foreign Investment MCQs
This topic sits within international and development economics. Questions define the balance of payments as an annual summary of a country's international economic and financial transactions, and ask what the current account balance records. You will also find items on official development assistance from OECD countries, food aid trends, the debate over the benefits of trade and investment raised by economists such as Jagdish Bhagwati, and how multinational corporations can help or harm developing countries. These issues are tested in economics optional papers and economics lecturer tests.
Exams that include Balance of Payments, Aid and Foreign Investment MCQs
Pakistan
- CSS
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- PPSC Lecturer tests
- FPSC
India
- UPSC CSE
- UGC NET
- State PSC exams
Bangladesh
- BCS
- Bangladesh Bank recruitment
Frequently asked questions
What is the balance of payments?
The balance of payments is a systematic record of all economic and financial transactions between a country's residents and the rest of the world over a period, usually a year. It is divided into the current account, the capital account and the financial account.
What does the current account include?
The current account records trade in goods and services, primary income such as wages, interest and profits earned abroad, and secondary income such as remittances and grants. A current account deficit means a country spends more on these items abroad than it earns from them.
How many Balance of Payments, Aid and Foreign Investment MCQs are on MCQs360?
MCQs360 has 19 MCQs on balance of payments, aid and foreign investment, free with no sign-up and with instant answers. They help you revise international economics terms before CSS, PMS or lecturer papers. Start with the current account questions, as they build the base for the rest.
Last reviewed October 2026