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Test: Open Economy Macroeconomics - 2


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20 Questions MCQ Test Indian Economy for UPSC CSE | Test: Open Economy Macroeconomics - 2

Test: Open Economy Macroeconomics - 2 for UPSC 2022 is part of Indian Economy for UPSC CSE preparation. The Test: Open Economy Macroeconomics - 2 questions and answers have been prepared according to the UPSC exam syllabus.The Test: Open Economy Macroeconomics - 2 MCQs are made for UPSC 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Open Economy Macroeconomics - 2 below.
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Test: Open Economy Macroeconomics - 2 - Question 1

Point out a merit of flexible exchange rate

Test: Open Economy Macroeconomics - 2 - Question 2

Point out a demerit of fixed exchange rate

Test: Open Economy Macroeconomics - 2 - Question 3

Point out a demerit of flexible exchange rate

Test: Open Economy Macroeconomics - 2 - Question 4

A component of current account of the BOP account is

Test: Open Economy Macroeconomics - 2 - Question 5

Currency depreciation occurs when

Test: Open Economy Macroeconomics - 2 - Question 6

Currency appreciation occurs when

Detailed Solution for Test: Open Economy Macroeconomics - 2 - Question 6

Currency appreciation refers to the increase in the value of one currency against another.

Test: Open Economy Macroeconomics - 2 - Question 7

When currency becomes less valuable for the Rest of the world, it is called

Test: Open Economy Macroeconomics - 2 - Question 8

Managed floating exchange rate is a system in which the

Detailed Solution for Test: Open Economy Macroeconomics - 2 - Question 8

Managed floating is a tool employed by the Central bank to restore the value of the country's currency in relation to other countries within the desired limits, even when the exchange rate is determined by the market forces of demand and supply.

Test: Open Economy Macroeconomics - 2 - Question 9

A component of capital account of balance of payment is

Test: Open Economy Macroeconomics - 2 - Question 10

Which transactions determine the balance of trade?

Test: Open Economy Macroeconomics - 2 - Question 11

Balance of trade is in surplus when

Test: Open Economy Macroeconomics - 2 - Question 12

A deficit in BOP occurs

Test: Open Economy Macroeconomics - 2 - Question 13

Devaluation is a

Detailed Solution for Test: Open Economy Macroeconomics - 2 - Question 13

Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency, group of currencies, or currency standard. Countries that have a fixed exchange rate or semi-fixed exchange rate use this monetary policy tool. It is often confused with depreciation and is the opposite of revaluation, which refers to the readjustment of a currency's exchange rate.

Test: Open Economy Macroeconomics - 2 - Question 14

Depreciation is a

Detailed Solution for Test: Open Economy Macroeconomics - 2 - Question 14

Reduction in the price of domestic currency in terms of all foreign currencies by the govt

Test: Open Economy Macroeconomics - 2 - Question 15

When price of a foreign currency rises its supply also rises.

Test: Open Economy Macroeconomics - 2 - Question 16

If exchange rate increases, this will make

Test: Open Economy Macroeconomics - 2 - Question 17

The demand for foreign exchange and the exchange rate has

Test: Open Economy Macroeconomics - 2 - Question 18

The demand curve for foreign exchange is

Test: Open Economy Macroeconomics - 2 - Question 19

The supply of foreign exchange and the exchange rate has

Test: Open Economy Macroeconomics - 2 - Question 20

The supply curve of foreign exchange is

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