Question 1

Devaluation raised the domestic price of --------------

Accepted Answer

A) Exports 
B) Imports 
C) Both exports and imports 
D) None of these

Question 2

------------- of a country is the relation over a period between the values of her exports and the values of her imports

Accepted Answer

A) BOP 
B) BOT 
C) Budget 
D) None of these

Question 3

Which is the invisible item in the BOP

Accepted Answer

A) Machinery 
B) Tourist 
C) Car 
D) None of these

Question 4

A deficit budget leads to ----------------

Accepted Answer

A) Decrease in the value of domestic currency 
B) Increase in the value of domestic currency 
C) Stability in the exchange rate 
D) None of these

Question 5

The most popular currencies in the offshore market are -----------

Accepted Answer

A) Dollar and Yen 
B) Dollar and Euro 
C) Euro and Yen 
D) Euro and Rupee

Question 6

Speculation is not possible in the case of --------- system

Accepted Answer

A) Flexible 
B) Gold standard 
C) Fixed 
D) None of these

Question 7

Buffer stock financing was introduced by------------

Accepted Answer

A) IMF 
B) IFC 
C) IDA 
D) IBRD

Question 8

The classical theory of international trade was developed by

Accepted Answer

A) Adam Smith 
B) Marshall 
C) Keynes 
D) None of these

Question 9

When exports increase, the supply of foreign currency -----------

Accepted Answer

A) Increases 
B) Decrease 
C) Remains constant 
D) None of these

Question 10

The agreement, TRIPs and TRIMs are related to -------------

Accepted Answer

A) ADB 
B) IBRD 
C) WTO 
D) None of these

Question 11

Capital outflows leads to increase in the ---------------

Accepted Answer

A) Supply of foreign currencies 
B) Demand for foreign currencies 
C) Demand for domestic currency 
D) None of these

Question 12

Extending of economic activities across national boundaries is known as -------------

Accepted Answer

A) Liberalization 
B) Privatization 
C) Globalization 
D) None of these

Question 13

Purchasing Power Purity Theory presents a line between exchange rates and --------

Accepted Answer

A) Interest rate 
B) Inflation 
C) BOP 
D) None of these

Question 14

-------------- is a social factor that influence the exchange rate

Accepted Answer

A) War 
B) Tourism 
C) Changes in preferences 
D) None of these

Exam 4: Global Economy: Exchange Rates, Monetary Policies, and Economic Strategies

Devaluation raised the domestic price of --------------