CBSE Class 12 Economics Open Economy Macroeconomics MCQs Set B

Question. Which one is a source of the demand for foreign exchange?
(a) Imports of Goods and Services from Abroad
(b) Investment in Foreign Nations
(c) Gift Scheme to Foreign Nations
(d) All of the options

Answer : D

Question. Balance of trade means:
(a) Capital transactions
(b) Import and export of goods,
(c) Total credit and debit
(d) All of the options

Answer : B

Question. Which one is the invisible item of Balance of Payment?
(a) Banking
(b) Shipping
(c) Communication
(d) All of the options

Answer : D

Question. In which of the following categories are economic transactions of balance of trade recorded?
(a) Visible items;
(b) Invisible items;
(c) Capital items;
(d) All of the options

Answer : A

Question. Which one is a king of exchange rate ?
(a) Fixed Exchange Rate
(b) Flexible Exchange Rate
(c) Both (a) and (b)
(d) None of the options

Answer : C

Question.Which one is a merit of flexible exchange rate ?
(a) Simple System
(b) Continuous Adjustments
(c) Improves Balance of Payments
(d) All of the options

Answer : D

Question. Which one is a kind of fixed exchange rate ?
(a) Gold Standard System of Exchange Rate
(b) Bretton Woods System of Exchange Rate
(c) Both (a) and (b)
(d) None of the options

Answer : C

Question. Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely:
(a) To rise
(b) To fall
(c) To rise or to fall
(d) To remain affected

Answer : B

Question. Which items are included in the balance of trade?
(a) Invisible Item
(b) Capital Transfer
(c) Visible Item
(d) All of the options

Answer : C

Question. The exchange rate at which demand for foreign currency becomes equal to its supply, is called:
(a) Equal rate of exchange;
(b) Unequal rate of exchange;
(c) Equilibrium rate;
(d) All of the options

Answer : C

Question. What is the relationship between demand for foreign exchange and exchange rate?
(a) Inverse;
(b) Direct;
(c) One to one;
(d) No relationship

Answer : A

Question. What is the relationship between supply of foreign exchange and exchange rate?
(a) Inverse;
(b) Direct;
(c) One to one;
(d) No relationship

Answer : B

Question. If Rs 150 are required to buy $ 2, instead of Rs100 earlier, then:
(a) Domestic currency has depreciated;
(b) Domestic currency has appreciated;
(c) Rupee value of import bill will increase;
(d) Both (a) and (c) (d)

Answer : D

Question. Which one is the visible item of Balance of Payments ?
(a) Machine
(b) Cloth
(c) Cement
(d) All of the options

Answer : D

Question. Trade of visible items between the countries is known as ________
(a) Balance of Payment
(b) Balance of Trade
(c) Deficit Balance
(d) All of the options

Answer : B

Question. Which one is a demerit of the fixed exchange rate?
(a) Ignores National Interests
(b) Restricted Movement of Capital
(c) Sudden Fluctuations in Exchange Rates
(d) All of the options

Answer : D

Question. The price of one currency in terms of another is known as _________
(a) Foreign exchange rate
(b) Trade rate
(c) Interest rate
(d) Balance of Payment

Answer : A

Question. Decrease in the value the foreign commodities is known as _________
(a) Revaluation
(b) Devaluation
(c) Deflation
(d) All of the options

Answer : A

Question. The operation of future delivery in the foreign exchange market is known as ________
(a) Spot market
(b) Current market
(c) Forward market
(d) Domestic market

Answer : C

Question. Which one is the item of the Current Account?
(a) Import of Visible Items
(b) Expenses of Tourists
(c) Exports of Visible Items
(d) All of the options

Answer : D