Bank Interview Question answers

1. What is Balance of Trade?
 
The value of a country’s exports minus the value of its imports. Unless specified as the balance of merchandise trade, it normally incorporates trade in services, including earnings (interest, dividends, etc.) on financial assets.



2. What is Balanced Trade?
 
When A balance of trade equal to zero. (exports-imports=0)



3. What is Balance of merchandise trade?
 
The value of a country’s merchandise exports minus the value of its merchandise imports.



4. What is a favorable balance of trade?
 
It is the difference between exports and imports. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus.



5. What is Balance of Payments?
 
A list, or accounting, of all of a country’s international transactions for a given time period, usually one year. Payments into the country (receipts) are entered as positive numbers, called credits; payments out of the country (payments) are entered as negative numbers called debits. A single number summarizing all of a country’s international transactions: the balance of payments surplus.



6. What is Balance of payments adjustment mechanism?

Any process, especially any automatic one, by which a country with a payments imbalance moves toward balance of payments equilibrium



7. What is Monopolistic Competition?
 
A market structure in which there are many sellers each producing a differentiated product. Each can set its own price and quantity, but is too small for that to matter for prices and quantities of other producers in the industry.



8. What is MFN?
 
MFN stands for Most Favoured Nation. The principle, fundamental to the GATT, of treating imports from a country on the same basis as that given to the most favored other nation. That is, and with some exceptions, every country gets the lowest tariff that any country gets, and reductions in tariffs to one country are provided also to others.



9. What is Gold Standard?
 
A monetary system in which both the value of a unit of the currency and the quantity of it in circulation are specified in terms of gold. If two currencies are both on the gold standard, then the exchange rate between them is approximately determined by their two prices in terms of gold.



10. What is Balance on capital account?

A country’s receipts minus payments for capital account transactions.