Open Economy Macroeconomics Test 12

Result

Open Economy Macroeconomics Test 12

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Weekly Quiz Competition

Question 1
1 / -0

The Bretton Woods exchange rate system was established as a fixed exchange rate system, in the conference held at Bretton Woods in __________.

A
1925

B
`1912

C
1944

D
1933
Question 2
1 / -0

Full form of SDRs:

A
Suitable Drawing Rights

B
Special Drawing Rights

C
Special Derivation Rights

D
None of the above

Solution

Special drawing rights. Special drawing rights (abbreviated SDR, ISO 4217 currency code XDR (numeric: 960)) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF).
Question 3
1 / -0

The Triffin Dilemma was named after ____________.

A
John Triffin

B
Robbert Triffin

C
Henry Triffin

D
Adam Triffin
Question 4
1 / -0

For which of the following purposes Indian currency is fully convertible? Select correct code :
1. Repatriation of remittances
2. Interest payments of foreign loans
3. Direct foreign investment
4. Indirect foreign investment
5. Trade

A
1,3 and 5

B
1,2,4 and 5

C
3,4 and 5

D
2,4 and 5

Solution

Rupee is fully convertible in the cases interest payment, remittances, grants and indirect foreign investment (though, it belongs to the capital account).
Question 5
1 / -0

The Smithsonian Agreement was a temporary agreement negotiated in ____________.

A
1971

B
1976

C
1970

D
1980
Question 6
1 / -0

The Bretton Woods Conference set up the ________________.

A
World Bank

B
IMF

C
Asian Development Bank

D
WTO
Question 7
1 / -0

The breakdown of the Bretton Woods System was in _________.

A
1990

B
1969

C
1971

D
1981
Question 8
1 / -0

Select the correct statement/statements for the situation when a currency goes for 'devaluation' using the code given below:
1. Fall in the value of currency vis-a-vis international currencies.
2. Exports become more competitive.
3. Trading partners see fall in their exports.

A
1 and 2

B
2 and 3

C
1 and 3

D
1, 2 and 3

Solution

Though devaluation in currencies are discouraged and negated with excessive pressure coming from the trading partners of the country, it ultimately makes goods of the country cheaper in the world market and the economy earns profit from the exports. The increase in profit of export takes place due to increase in 'volume' of the exports. In practice, exporters forego more goods to earn the same amount of foreign currency.
Question 9
1 / -0

Select the correct one/ones related to the provision of rupee convertibility in India, using the code given below:
1. India allows partial convertibility to rupee in the capital account in the case of outflow of capital by Indians.
2. To the extent capital outflow by a foreign company is concerned, India allows full convertibility to rupee in the capital account up to the level of $$ \,$500$$ million.

A
Only 1

B
Only 2

C
I and 2

D
Neither 1 nor 2

Solution

Though India allows only partial convertibility to rupee in the capital account, it has the provision for its full convertibility up to $500million.
Question 10
1 / -0

Select the correct outcomes up depreciation in a country's currency-using the code given below:
1. Export of the country goes up as value of the export falls in the international market.
2. At times, countries use it as a means to promote their exports.
3.Promoting exports through depreciation in ones currency is like selling national assets at throwaway prices to the world.

A
Only 1

B
Only 3

C
2 and 3

D
1,2 and 3

Solution

Depreciation makes a country's exports become cheaper in the international market (i.e. the value of export items fall for the importers)this makes the country export more (increase in 'volume' of the export). Countries use depreciation as a tool to promote their exports (in present times, China has been doing the same)but such a policy is not healthy in long-term.

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Re-Attempt Weekly Quiz Competition

Open Economy Macroeconomics Test 12

Result

Open Economy Macroeconomics Test 12

Score

-

Rank

-

SHARING IS CARING

Question 1

1925

`1912

1944

1933

Question 2

Suitable Drawing Rights

Special Drawing Rights

Special Derivation Rights

None of the above

Solution

Question 3

John Triffin

Robbert Triffin

Henry Triffin

Adam Triffin

Question 4

1,3 and 5

1,2,4 and 5

3,4 and 5

2,4 and 5

Solution

Question 5

1971

1976

1970

1980

Question 6

World Bank

IMF

Asian Development Bank

WTO

Question 7

1990

1969

1971

1981

Question 8

1 and 2

2 and 3

1 and 3

1, 2 and 3

Solution

Question 9

Only 1

Only 2

I and 2

Neither 1 nor 2

Solution

Question 10

Only 1

Only 3

2 and 3

1,2 and 3

Solution

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Score

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