NCERT MCQ ON Foreign Exchange Rate:
Question 1: The exchange rate at which demand for foreign currency becomes equal to its supply called
- a) Equal rate of exchange
- b) Unequal rate of exchange
- c) Equilibrium rate
- d) All of these
Answer : Equilibrium rate
Question2 : According to adjustable peg system (or Bretton Woods System ) of Exchange Rate :
- a) Different currencies were pegged to one currency (US dollar)
- b) US dollar was assigned gold value at a fixed price
- c) Parity between two currencies was determined by the quantity of gold contained in them
- d) All of these
Answer : All of these
Question 3: What is the relationship between demand for foreign exchange and exchange rate ?
- a) Inverse
- b) Direct
- c) One to one
- d) No to relationship
Answer : Inverse
Question 4: What is the relationship between supply of foreign exchange and exchange rate?
- a) Inverse
- b) Direct
- c) One to one
- d) No to relationship
Answer : Direct
Question5 : Spot market is that market where in :
- a) Only spot or current transactions are handled
- b) Foreign exchange transactions are meant for future delivery
- c) Exchange rate is determined instantly
- d) Both (a) and (c)
Answer : Both (a) and (c)
Question6 : Forward market is that market which :
- a) Handled transactions of foreign exchange meant for future delivery
- b) Handled current transactions
- c) Handled current as well as future transactions
- d) None of these
Answer : Handled transactions of foreign exchange meant for future delivery
Question 7: If Rs. 150 ate required to buy $ 2, instead of Rs.100 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)
Answer : Both (a) and (c)
Question8 : BoP is measured as :
- a) Difference between visible items of exports and imports
- b) Difference between invisible items of exports and imports
- c) Difference between external and internal flow of gold
- d) Difference between all receipts of foreign exchange and payments of foreign exchange
Answer : Difference between all receipts of foreign exchange and payments of foreign exchange
Question 9: Balance of trade is measured as :
- a) Difference between import and export goods
- b) Difference between import and export services
- c) Difference between import and export of capital
- d) Difference between all export and all imports
Answer : Difference between import and export goods
Question 10: In which of the following categories are economic transactions of balance of trade recorded ?
- a) Visible items
- b) Invisible items
- c) Capital transfers
- d) All the above
Answer : Visible items
Question 11: Which of the following transactions are recorded in the current account of the balance of payments ?
- a) Import and export of goods and services
- b) Transfers from one country to the other
- c) Both (a) and (b)
- d) None of these
Answer : Both (a) and (b)
Question12 : Which of the following items relate to BoP which :
- a) Foreign investment
- b) Loans
- c) NRI remittance
- d) All of these
Answer : All of these
Question 13: Autonomous items are related to those transactions which :
- a) Are determined by motive of profit
- b) Are not concerned with the equilibrium status of BoP
- c) Both (a) and (b)
- d) None of these
Answer : Both (a) and (b)
Question 14: Accommodating items are those items of Bop which :
- a) Are not determined by profit motive
- b) Are conditioned by the positive or negative BoP status
- c) Deal with capital transfers only
- d) Both (a) and (b)
Answer : Both (a) and (b)
Question 15: Disequilibrium in balance of payments means:
- a) Surplus balance of payments
- b) Deficit balance of payments
- c) Both (a) and (b)
- d) None of these
Answer : Both (a) and (b)
Question 16: If balance of trade is (-) Rs.600 crore and value of exports is rs.500 crore then the value of imports will be :
- a) Rs.1,300 crore
- b) Rs. 300 crore
- c) Rs.1,100 crore
- d) Rs. 1,200 crore
Answer : Rs.1,100 crore
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