If a large car importer in Pakistan wants to bring in many cars, what will tend to happen to the exchange value of the Pakistani rupee?
Correct answer A. Depreciate
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Economics MCQs
Page 74 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 74 of 131
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
At the peak of the business cycle, what is the likely position of aggregate demand, unemployment and inflation, and in which direction will the current account tend to move?
Correct answer C. Is static; low; rises; deficit
When the $/£ exchange rate rises, what happens to the pound, and what happens when it falls?
Correct answer B. Appreciates, depreciates
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Starting from internal and external balance, what will a fall in aggregate demand do to the current account?
Correct answer D. Surplus
When capital mobility is perfect, what tends to offset differences in interest rates between countries?
Correct answer C. Expected exchange rate changes
With fixed exchange rates and no private capital flows, what will the central bank do to correct a balance of payments deficit?
Correct answer C. Sell foreign exchange, buy domestic currency
Without international capital controls, what do central banks set in order to give speculators the right incentive?
Correct answer A. Interest rates
The competitive gain from a devaluation is likely to be offset by which two developments?
Correct answer C. Higher import prices, higher wage increases
According to Keynes’s liquidity preference theory, what determines the interest rate?
Correct answer B. The supply and demand for money
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In the short run, what mainly determines the level of floating exchange rates?
Correct answer D. Speculation
On a money market graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis, what does a rise in the price level do?
Correct answer B. Shifts money demand to the right and increases the interest rate
How do floating exchange rates typically behave in the short run?
Correct answer B. Volatile
In the market for real output, what is the immediate effect of an increase in the money supply?
Correct answer D. To shift the aggregate demand curve to the right
Why is fiscal policy weak under floating exchange rates?
Correct answer B. Fiscal expansion crowds out exports
A wave of pessimism among US investors and consumers reduces spending. If the US Federal Reserve (whose remit is broader than the Bank of England’s, which targets only inflation) uses activist stabilisation policy, what should it do?
Correct answer D. Decrease interest rates
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What were the main features of the European Monetary System?
Correct answer D. All of the above
If the marginal propensity to consume (MPC) is 0.75, what is the value of the multiplier?
Correct answer C. 4
The Single European Act committed ____ governments to a ____ by 1992. Which pair completes the sentence?
Correct answer C. European Union, single market
A wave of optimism among investors and consumers has raised spending so that output is above its long-run natural rate. If policy makers use activist stabilisation policy, what should they do?
Correct answer B. Decrease government spending, which shifts the aggregate demand curve to the left
A monetary union involves which three features?
Correct answer D. Permanently fixed exchange rates, free capital movements, a single interest rate