CBSE Questions for Class 12 Commerce Economics Open Economy Macroeconomics Quiz 1 - MCQExams.com

BOP is in surplus, then _____________.
  • it adds to external reserves of the country
  • it draws from external reserves of the country
  • it adds to internal reserves of the country
  • it draws from internal reserves of the country.
Deficit in balance of trade indicates deficit in balance of payments also.
  • True
  • False
'Invisible' exports include __________________.
  • Payment of services obtained from foreign insurance agents
  • foreign tourists in the country
  • PL 480 loan
  • Payment for services rendered by Indian Banks abroad
Devaluation works best when __________________.
  • it is accompanied by a decline in short-term interest rates
  • foreign demand for the devaluing country's exports is elastic
  • the devaluing country's demand for imports is inelastic
  • devaluation brings about price rises in the export industries of the devaluing country
To keep the balance of payments deficit from becoming excessive, an under-developed country should ____________.
  • Reduce imports
  • Increase the price of articles exported
  • Increase the quantum of exports
  • Stabilize the price level
The most important of the non-tariff trade barriers are __________.
  • quotas
  • health regulations
  • pollution standards
  • labelling and packaging regulations
According to the IMF, SDR stands for _________________.
  • Standard Depreciation Rate
  • Special Drawing Rights
  • State Bank's Deposit Rate
  • Special Deposit Rate
The balance of trade is also known as _____________.
  • capital transfers
  • gain from trade
  • the visible balance
  • all of the above
Trade Balance of a country is equal to ____________________.
  • balance of export and import of goods
  • balance of payments + net Invisibilities
  • balance of payments minus net invisibilities
  • export minus import
A change from USD 3 = GBP 1 to USD 2 = GBP 1 represents ___________.
  • a depreciation of the dollar
  • an appreciation of the dollar
  • an appreciation of the pound
  • None of the above
A closed economy is one having _______.
  • imports only
  • exports only
  • no export or imports
  • both imports and exports
A surge in foreign capital inflows in India would lead to the ______________________.
  • Sale of foreign exchange by the central bank in order to prevent depreciation of rupee.
  • Purchase of foreign exchange by the central bank in order to prevent depreciation of the rupee.
  • Sale of foreign exchange by the central bank to prevent the appreciation of the rupee.
  • Purchase of foreign exchange by the central bank in order to prevent appreciation of the rupee.
Identify the one, from the following, which is not a type of disequilibrium in the balance of payments of a country.
  • Cyclical disequilibrium
  • Secular disequilibrium
  • Structural disequilibrium
  • Sectoral disequilibrium
By "deemed exports" it means ______________.
  • supplies of goods and services to units within the country which can earn foreign currency to the country
  • exports made by units situated in EPZ areas to out of country
  • exports made by EOU out of the country
  • anticipated value of exports
Balance of trade of a country is equivalent to __________________.
  • difference between the inward and outward remittances made in foreign exchange
  • surplus generated shown in a trading account
  • difference between exports and imports
  • none of the above
What is the main feature of a flexible exchange rate system?
  • Determined by forces of market supply
  • Determined by forces of market demand
  • Both A and B
  • None of the above
Match the items of List-I items in List-II and select a correct code:
List-IList-II
(a) Current Account(i) Official Capital
(b) Capital Account(ii) Reserves from foreign countries
(c) Unilateral Payments(iii) Reparations
(d) Official Statement Account(iv) Visible and invisible exports and imports
  • $$(a) - (i), (b) - (iii), (c) - (ii), (d) - (iv)$$
  • $$(a) - (iv), (b) - (i), (c) - (ii), (d) - (iii)$$
  • $$(a) - (iv), (b) - (i), (c) - (iii), (d) - (ii)$$
  • $$(a) - (iii), (b) - (ii), (c) - (i), (d) - (iv)$$
Which one of the following is true statement?
  • Balance of trade deals with export and import of invisible items only.
  • Balance of payment deals with both visible and invisible items.
  • The current account is not a component of balance of payment.
  • All of the above.
What is bilateral aid?
  • It is technical aid given by IMF to various countries.
  • It is given directly by one country to another.
  • It is aid with the condition that the repayment will be in inconvertible currency.
  • It is a commercial loan made available by various institutions jointly.
Which of the following is/are the reasons for the collapse of Bretton Woods system?
$$1$$. The refusal by the US Treasury to convert short-term liability into gold.
$$2$$. The US move to make dollar inconvertible.
$$3$$. The devaluation of US dollar in 1973.
Select the correct answer using the code given.
  • $$1$$ only
  • $$1$$ and $$2$$
  • $$2$$ and $$3$$
  • $$1, 2$$ and $$3$$
By devaluation we mean ___________________.
  • a fall in the external value of a currency caused by central bank action
  • a fall in the external value of a currency caused by the market forces
  • a fall in the external value of a currency caused by Government action
  • none of the above
Which of the following economic concepts is categorised on the basis of current account or capital account or both?
  • Balance of payments
  • Value of the foodgrain stock of a country
  • Gross National Product (GNP)
  • Gross National Income (GNI)
What is the meaning of devaluation of money?
  • Decrease in the internal value of money
  • Decrease in the external value of money
  • Decrease in both internal and external values of money
  • The government takes back currency notes of any denomination
Which of the following can be included in the current account of the balance of payments?
(i) Purchase of goods from abroad
(ii) sale of services abroad
(iii) Worker's remittances from abroad
(iv) Sale of copyright to foreigners
(v) Direct investment in equity capital
  • (i), (ii) and (iii)
  • (i), (ii) and (iv)
  • (i), (ii), (iii) and (v)
  • (i), (ii), (iii) and (iv)
Purchasing Power Parity theory is related with ________.
  • interest rate
  • bank rate
  • wage rate
  • exhange rate
Which country follows a fixed exchange rate system?
  • India
  • USA
  • UK
  • Cuba
Which of the following sections is not a part of the balance of payments?
  • Current Account
  • Capital Account
  • Official Reserve Account
  • Loss Accounts
Which country follows an flexible exchange rate system?
  • Cuba
  • Dijibouti
  • Eritrea
  • USA
What is foreign exchange rate?
  • The price of one currency in term of another
  • Price of one quantity in terms of another
  • Price of one currency in terms of another economies price
  • Price of one economies price in terms of another economies currency
Under flexible exchange rate system, exchange rate is determined by the _____.
  • Demand for foreign exchange
  • Supply for foreign exchange
  • Supply - Demand forces
  • Government
0:0:1


Answered Not Answered Not Visited Correct : 0 Incorrect : 0

Practice Class 12 Commerce Economics Quiz Questions and Answers