Explore topic-wise InterviewSolutions in Current Affairs.

Whenever the cost of exported goods is more than the cost of imported goods, Balance of Trade shows surplus.

Trade means sale and purchase of goods and services. Trade is of two types- internal trade and international trade.

It is a floating rate of exchange, determined by the supply and demand for the different currencies.

It means that if exchange rates are high, then foreign exchange demand will be less, and if the exchange rates are lower, then foreign exchange demand will be higher.

Balance of Payment is a method to record the payments for international transactions for any country.

Exchange rate refers to the price of one currency in relation to other currencies in the international money market (or international exchange market).

It is the market where currencies of two or more countries are exchanged.
Two main competitors of foreign exchange market are –

1. commercial banks, and
2. International Monetary Fund.

When import is more than the export, trade deficit takes place.

Whenever a country’s value of export is more than the value of import then the Balance of Trade account of that country is favourable.

Following are the main elements of Capital Accounts of Balance of Payment in India:
(i) Foreign investment: In this, foreign investors purchase domestic companies and also establish the units of business in the domestic economy.
There are two types of foreign investments :
(a) Direct Foreign Investment. 

(b) Portfolio investment.

(ii) Loans : In this, borrowings are included. These are of two types : Foreign aid and Commercial loans.

(iii) Banking Capital: In this, mainly those banks and financial institutions are included, which officially work under foreign exchange market.

It provides more chances of selection of goods to the consumers, producers and investors.

Invisible items are those items which cannot be seen and which cannot be measured in terms of quantity. Invisible items simply means those items which are not physical in nature. Invisible items include services like banking, insurance and technological knowledge, etc.

In Balance of Trade, the value of imports and exports are included, and in Balance of Payment, all the foreign financial transactions are included.

All those receipts and payments are included in capital account which help in formation of new capital or ends the current liabilities. 

Capital Account can be divided into two parts :

1. Long term Capital Account, and
2. Short term capital account.

Visible and invisible, both items, are included in balance of payment.

Open economy is an economy in which goods and services of one country are traded with the other countries. In other words, it is Em economy in which mutual exchange of goods and services and financial monetary assets takes place with other countries.

Following are the ways by which our choice expands :

1. Consumers and firms can choose between domestic goods and foreign goods,
2. Investors can choose between domestic assets and foreign assets.

1. Export of goods.
2. Income from foreign investments.

Devaluation is a process of lowering the country’s currency in terms of foreign currency. It simply means lowering the external value of country’s currency. Government adopts this measure to reduce the trade deficit. This makes imports costlier and exports cheaper. In this way, government, though devaluation, tries to correct disequilibrium in balance of payment.

Import and export of goods between two countries.

Every country imports and exports goods and services. Out of these, certain items are visible and certain items are invisible. The value of visible items is included in balance of trade, whereas balance of payment is a wider concept. In this, visible and invisible both items are included. Invisible items include services like banking, insurance and technological knowledge, etc. The payment of these services is made between the coutries, but not recorded at ports. Along with it, capital account is also included.

According to Sodersten : “Balance of payment is a method to record the payments for international transactions for any country”.

Therefore, Balance of Payment is a more wider term than Balance of Trade, because in this, both visible and invisible items are included.

If cost of production is similar, there will be no international trade.

1. election of goods.
2. Selection of Properties.
3. Selection of employment and production.

1. Foreign borrowings
2. Foreign investments.

Both Revaluation and Devaluation are used to adjust a country’s Balance of Payment. Devaluation is a process of lowering country’s currency in terms of foriegn currency. It simply means lowering the external value of country’s currency. Government adopts this measure to reduce the Trade Deficit. This makes imports costlier and exports cheaper. In this way, government, through devaluation, tries to correct disequilibrium in Balance of Payment.

Revaluation is a policy instrument to adjust Balance of Payment. Through revaluation, value of country’s currency is increased in terms of foriegn currency. This makes exports of the country relatively costlier and imports cheaper and this reduces the surplus foreign trade.

Devaluation and revaluation both are adopted under fixed monetary exchange rate system. If revaluation is done under flexible or floating exchange rate system, then it is called appreciation money.

1. Increasing the export.
2. Decreasing the import.

Balance of trade = Export – import
= 320 – 280
= Rs. 40 crore. 

(a) Revaluation

(b) Devaluation

(d) Import and export of goods

This lesson is classified under the unit Nativity.

(b) JuanA.A. Sedillo

The old man was unhurried.

A landslide is a form of mass wasting that includes a wide range of ground movements such as rock falls, deep failure of slopes and shallow debris flows. It is also known as landslip, or mud – slip or mudslide.

A prolonged period of abnormally low rainfall leading to a shortage of water is called drought.

Yes, by reading the para 1,1 thought the ancestors of the old man lived in Rio en Medio.

The words ‘who’ and ‘these’ refer to senator and people in the mountains.

The old man’s style was similar to that of Charlie Chaplin. Chaplin once did that in a picture, He was the Janitor of a bank in that movie. The writer remembered this when he observed the old man.

Earthquake refers to a sudden violent shaking of the ground, typically causing devastation, as a result of movements within the earth’s crust or volcanic action.

Rainfall that is neither retained on the land surface nor infiltrated into soil is called as excess rainfall.

Natural hazard means a crisis occurring after natural disasters. Due to these types of disasters, man generally suffer many problems.

The old man’s orchard was big and beautiful. A small stream was flowing through the orchard. The house was unpleasant to look because it was old fashioned. Many trees were fruit-bearing trees. A number of fruits were more on the tree, so the orchard is attractive.

d.  to make themselves comfortable

e.  to prepare everyone for the main talk

An overflow of a large amount of water beyond its normal limits, especially over flooded land is called as flood.

The mankind puts the atmosphere into trouble by insensibly exploiting the resources, misusing the land surface, deforestation, land and soil erosion and overuse of ground water.

A natural event such as flood, earthquake or hurricane that causes great damage or loss to life and property.

Such change in the nature that causes great damage or loss to life and property is called natural disaster.

On the basis of their origin, natural disasters can be classified into three parts:

1. Seasonal disasters. 

2. Topographical disasters. 

3. Man – made disasters.

The disasters that take place due to change in the arrangement of natural and artificial physical features of a region are called topographical disasters. Landslides, earthquakes, volcanoes are included in topographical disasters.

The changes in the nature that are extremely useful, helpful or beneficial for mankind are called as natural boon.