economics MCQs – Page 418

Practise multiple-choice questions from economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

economics Mcqs

1. the national economy 2. profit maximizing under perfect competition and monopoly 3. application of economics 4. the aggregate demand aggregate supply model 5. surplus 6. money interest rates and output 7. average and total cost 8. stabilization adjustment reform and privatization 9. risks and diversification efficient market hypothesis 10. the phillips curve 11. supply and demand 12. capital formation investment choice information technology and technical progress 13. aggregate supply unemployment and inflation 14. elasticity 15. comparative gdp 16. roots of modern macroeconomics 17. production factors 18. poverty malnutrition and income inequality 19. trade regulations and industrial policies 20. monetary union 21. exchange rate systems and currency crises 22. economic development in historical perspective 23. exchange rate determination 24. monopoly competition 25. the balance of payments 26. inflation productivity 27. macroeconomic issues and analysis 28. employment migration and urbanization 29. macroeconomic policy tools 30. supply side policies 31. exchange rate adjustments and the balance of 32. miscellaneous 33. taxation 34. trade policies for the developing nations 35. markets efficiency and the public interest 36. the external debt and financial crises 37. budget deficits and the trade balance 38. alternative theories of the firm 39. public goods 40. the meaning and measurement of economic development 41. characteristics and institutions of developing countries 42. agriculture irrigation system of pakistan 43. education health and human capital 44. economic problems of developing countries 45. theories of economic development 46. basic of economics 47. consumer theory vs real consumers 48. applied microeconomics 49. long term economic growth 50. externality internality 51. fiscal and monetary policy 52. prices wages taxes 53. balance of payments aid and foreign investment 54. international factor movements and multinational corporations 55. entrepreneurship organization and innovation 56. the international economy and globalization 57. population and development 58. non tariff trade barriers 59. foundations of modern trade theory 60. global economic development 61. market 62. rural poverty and agricultural transformation 63. regional trading arrangements 64. foreign exchange 65. introduction to economics 66. world economy miscellaneous 67. sources of comparative advantage 68. natural resources and the environment toward sustainable development 69. monopoly 70. asymmetric information 71. income inequality 72. labour market 73. tariffs 74. development planning and policy making the state and the market 75. oligopoly 76. industrial development 77. costs supply and perfect competition 78. human capital 79. monetary fiscal and incomes policy and inflation 80. stocks

8341. All currencies other than the domestic currency of a given country are referred to as ?
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A. near monies

B. reserve currencies

C. foreign exchange

D. hard currency

8342. Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?
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A. forward transactions

B. cash transaction

C. differential actions

D. arbitrage

8343. The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ?
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A. forward contract

B. bid contract

C. spot contract

D. money contract

8344. Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market ?
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A. his desire to travel to Europe

B. his desire to purchase Treasury bills issued by the British government

C. his desire to open a bank account in Japan

D. his desire to purchase an automobile produced domestically

8345. In 1971, most countries ?
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A. gave up trying to fix exchange rates formally and began allowing them to be determined essentially by supply and demand

B. adopted a new system of fixed exchange rates

C. returned to the gold standard

D. adopted single internationally accepted currency whose use is limited to international transactions

8346. Speculators in foreign exchange markets do all of the following except ?
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A. attempt to buy currency at a low price and later resell that currency at a higher price

B. bear risk as they attempt to ____ beat the market||

C. attempt to profit by trading on expectations about future currency prices

D. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit

8347. The difference between bid (buying) rates and ask (selling) rates is called the ?
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A. arbitrage

B. forward transaction

C. profit

D. spread

8348. The exchange rate is kept the same across geographically separate markets by ?
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A. arbitrage

B. hedging

C. speculation

D. government regulation

8349. 1. The most widely traded currency in the foreign exchange market is the ?
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A. British pound

B. Chinese Yuan

C. euro

D. U.S dollar

8350. Exchange rates that are determined by the unregulated forces of supply and demand are ?
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A. pegged exchange rates

B. floating exchange rates

C. fixed exchange rates

D. managed exchange rates

8351. A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?
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A. inelastic

B. Unitary elastic

C. constant

D. elastic

8352. The price of one countrys currency in terms of another countrys currency is the ?
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A. exchange rate

B. currency valuation

C. terms of trade

D. balance of trade

8353. Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?
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A. sell; appreciation

B. buy; depreciation

C. sell; depreciation

D. buy; appreciation

8354. If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?
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A. $0.0909

B. $1.10

C. $0.28

D. $0.10

8355. Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations ?
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A. stabilizing

B. destabilizing

C. inflationary

D. deflationary

8356. The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
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A. purchasing power parity theory

B. J-curve theory

C. price feedback theory

D. trade feedback theory

8357. If a nations interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?
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A. appreciate under a system of floating exchange rates

B. depreciate under a system of floating exchange rates

C. depreciate under a system of fixed exchange rates

D. appreciate under a system of floating fixed rates

8358. The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?
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A. forward spread

B. forward discount

C. None of these

D. forward premium

8359. During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was ?
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A. rising price inflation in the United States

B. flows of foreign investment into the United States

C. a substantial increase in U.S exports

D. a substantial decrease in U.S imports

8360. In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?
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A. horizontal

B. upward

C. vertical

D. downward

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