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Exam( economics) Econ10401 international finance
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International finance final exam review (economics)
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Fourth Semester MA Economics(Private Registration)
ECO10401-International Finance
Multiple Choice Questions
1. By definition, currency appreciation occurs when
A The value of all currencies fall relative to gold.
B. The value of all currencies rise relative to gold.
C. The value of one currency rises relative to another currency.
D. None of these
2. Theory which considers change in exchange rate with fluctuations in inflation rates is
classified as
A. liquidated power parity
B. purchasing power parity
C. selling power parity
D. Mint Parity theory
3. If purchasing power parity were to hold even in the short run, then:
A. Real exchange rates should tend to decrease over time.
B. Quoted nominal exchange rates should be stable over time.
C. Real exchange rates should be stable over time.
D. Real exchange rates should be unstable over time.
4. Rule which states that similar set of goods and services produced in various
countries should have equal price is classified as
A. law of similar mortgage rate
, B. law of one type manufacturing
C. law of one price
D. law of Equi Marginal utility
5. A floating exchange rate
A. is determined by the national governments involved
B. remains extremely stable over long periods of time
C. remains extremely unstable over long periods of time
D. is allowed to vary according to market forces
6. The term Euro Currency market refers to
A. The international foreign exchange market
B. The market where the borrowing and lending of currencies take place outside
the country of issue
C. The countries which have adopted Euro as their currency
D. The countries which have adopted Rupee as their currency
7. Govt. policy about exports and imports is called:
A. Commercial Policy
B. Fiscal Policy
C. Monetary Policy
D. Exim Policy
8. Purchasing goods from a foreign country is called
A. Import
B. Entrepot
, C. Export
D. None of these
9. The currency used to Buy imported goods is
A. The Buyer's home currency
B. The seller’s home currency
C. Special drawing rights
D. IMF
10. Export of goods is called trade in
A. Visible goods
B. Basic goods
C. Visible goods
D. Invisible goods
11. It helps countries to meet deficit in BOP.
A. World Bank
B. WTO
C. IMF
D. ILO
12. Under a gold standard
A. a nation’s currency can be traded for gold at a fixed rate
B. a nation’s central bank or monetary authority has absolute control over its
money supply
C. new discoveries of gold have no effect on money supply or prices
D. new discoveries of gold have effect on money supply or prices
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