Question

(1) Export of Metro coaches to Australia will be recorded on... ... side of ... ... .account of BOP.

(a) Credit ,current
(b) Debit , current
(c) Credit,capital
(d) Debit, capital.

(2) Planned increase in the price of foreign currency in terms of domestic currency is termed as:

(a) Revaluation of domestic currency.
(b) Devaluation of domestic currency.
(c) Depreciation of foreign currency.
(d) Appreciation of foreign currency.​

Answer 1

Answer:

1. (d) debit, capital

2. (b) Devaluation of domestic currency.

Hope this helps you

Answer 2

Answer:

Q1. (d) Debit, capital.

Q2. (d) Appreciation of foreign currency.​

Explanation:

Q1. (1) Export of Metro coaches to Australia will be recorded on the debit side of the capital account of the BOP.

• Balance of payment refers to the official record of all financial transactions that are made internationally over a period of time.

• It is an authoritative record of all economic transactions with the rest of the world over a given period of time.
• BOP includes:

1. current a/c
2. capital account
3. official settlement a/c

Hence, the Export of Metro coaches to Australia will be recorded on the debit side of the capital account of the BOP.

Q2.  Planned increase in the price of foreign currency in terms of domestic currency is termed an Appreciation of foreign currency.

• Appreciation of foreign currency means the value or prices of foreign exchanges rise up compared to domestic currency.
• As a result, the prices will rise or increase.

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