Test: Open Economy Macroeconomics - 2


20 Questions MCQ Test Economy and Indian Economy (Prelims) by Shahid Ali | Test: Open Economy Macroeconomics - 2


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QUESTION: 1

Point out a merit of flexible exchange rate

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QUESTION: 2

Point out a demerit of fixed exchange rate

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QUESTION: 3

Point out a demerit of flexible exchange rate

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QUESTION: 4

A component of current account of the BOP account is

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QUESTION: 5

Currency depreciation occurs when

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QUESTION: 6

Currency appreciation occurs when

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QUESTION: 7

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

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QUESTION: 8

Managed floating exchange rate is a system in which the

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QUESTION: 9

A component of capital account of balance of payment is

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QUESTION: 10

Which transactions determine the balance of trade?

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QUESTION: 11

Balance of trade is in surplus when

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QUESTION: 12

A deficit in BOP occurs

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QUESTION: 13

Devaluation is a

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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.

QUESTION: 14

Depreciation is a

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QUESTION: 15

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

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QUESTION: 16

If exchange rate increases, this will make

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QUESTION: 17

The demand for foreign exchange and the exchange rate has

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QUESTION: 18

The demand curve for foreign exchange is

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QUESTION: 19

The supply of foreign exchange and the exchange rate has

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QUESTION: 20

The supply curve of foreign exchange is

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