Macroeconomics - Open Economy - MCQs with answers

Macroeconomics - Open Economy - MCQs with answers

1) Which among the following could be said to be an 'Open Economy'?

a) A nation that follows the doctrine of Free-market and Laissez-faire economics
b) A nation that trades with other nations in goods and services and financial assets
c) An economy that operates without government intervention
d) None of the above

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2) The records of exports and imports in goods and services and transfer payments is known as

a) Current account
b) Budget surplus
c) Economic leakage
d) degree of openness

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3) Exchange rates for one currency against another currency, are known as:

a) Real exchange rate
b) Nominal exchange rate
c) Superfluous exchange rate
d) None of the above

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4) The ratio of foreign rates to domestic rates measured in the 'same' currency is known as:

a) Real exchange rate
b) Nominal exchange rate
c) Superfluous exchange rate
d) None of the above

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5) Which among the following is taken as the real measure of a country's international competitiveness?

a) Real exchange rate
b) Nominal exchange rate
c) Superfluous exchange rate
d) None of the above

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6) When the exchange rate is determined by the market forces of demand and supply, it is known as :

a) Real exchange rate
b) Nominal exchange rate
c) Superfluous exchange rate
d) Floating exchange rate

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7) The Gold Standard was prevalent in the world from:

a) 15th century to 18th century
b) 9th century to 18th century
c) From 1870 till First World War
d) From 1670 till First World War

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8) When was the International Monetary Fund (IMF) set up?

a) 1912
b) 1214
c) 1942
d) 1944

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9) An increase in foreign income generally leads to:

a) increased exports, increased domestic output
b) decreased exports, increased domestic output
c) decreased exports, decreased domestic output
d) increased exports, decreased domestic output

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10) What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world?

a) Trade deficit
b) Capital Budget
c) Foreign imports
d) Balance of Payments or BoP

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