Open Economy Macroeconomics Test 7

Result

Open Economy Macroeconomics Test 7

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Weekly Quiz Competition

Question 1
1 / -0

GDR stands for _______.

A
Global Depository Receipts

B
Global Demand Receipts

C
Government Department Receipts

D
Gold Deposit Receipts
Question 2
1 / -0

Quantitative restrictions mean _________.

A
a restriction by Government on quantity of export or imports of goods from or to a country

B
a restriction by Government on quantity of production of goods by a country.

C
a restriction by Government on quantity of sale of goods by a manufacturer

D
a restriction by Government on quantity of quantity of raw material consumed.
Question 3
1 / -0

International reserves include _______.

A
government holding of gold

B
balance in International Monetary Fund

C
foreign currency reserves

D
all the three

Solution

International reserves include gold reserves, forex reserves and a balance held with the IMF that he country can draw from with times off stress. All three help the country maintain its position on the international market and manage its balance of payment account, by influencing its exchange rate.
Question 4
1 / -0

India devalued Rupee for the first time in ________.

A
1940

B
1966

C
1956

D
1991

Solution

Facing high inflationary pressures and large government deficits the rupee was devalued in 1966 for the first time.
Question 5
1 / -0

Depreciation of currency means a ________.

A
fall in exchange value of a country by market forces

B
reduction in external value/exchange value of currency by the Government

C
reduction in external value / exchange value due to wear and tear

D
all the three

Solution

When a country follows a floating exchange rate regime, it is possible for the currency to fall in value due to a fall in demand for the currency that can be caused for a variety of reasons like decline of demand for the country's exports or attractive investment opportunities abroad.
Question 6
1 / -0

FOB stands for _______.

A
Free On Board

B
Free Of Bond

C
Freight On Board

D
Freedom Of Bond
Question 7
1 / -0

Which of these measures is / are essential to make devaluation successful?

A
Export performance of exporting units should be strengthened

B
Export quality should be improved

C
Domestic prices should be checked

D
All the three
Question 8
1 / -0

In what way devaluation helps a country?

A
Improvement in Balance of Payment situation

B
Encourages exports

C
Discourages imports

D
All the three

Solution

A devaluation of the currency may help improve the balance of payments situation when it is in a deficit, as a devaluation makes it attractive to purchase domestic goods as it becomes relatively cheaper to do so thus the value of imports is likely to decrease and the value of exports is likely to increase.
Question 9
1 / -0

Foreign investments includes _______.

A
foreign direct investments

B
portfolio investments

C
foreign institutional investments

D
all the three
Question 10
1 / -0

If there is a surplus in Balance of payments ______.

A
it adds to external reserves of a country

B
it adds to internal reserves of a country

C
it reduces external reserves

D
it reduces internal reserves

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Re-Attempt Weekly Quiz Competition

Open Economy Macroeconomics Test 7

Result

Open Economy Macroeconomics Test 7

Score

-

Rank

-

SHARING IS CARING

Question 1

Global Depository Receipts

Global Demand Receipts

Government Department Receipts

Gold Deposit Receipts

Question 2

a restriction by Government on quantity of export or imports of goods from or to a country

a restriction by Government on quantity of production of goods by a country.

a restriction by Government on quantity of sale of goods by a manufacturer

a restriction by Government on quantity of quantity of raw material consumed.

Question 3

government holding of gold

balance in International Monetary Fund

foreign currency reserves

all the three

Solution

Question 4

1940

1966

1956

1991

Solution

Question 5

fall in exchange value of a country by market forces

reduction in external value/exchange value of currency by the Government

reduction in external value / exchange value due to wear and tear

all the three

Solution

Question 6

Free On Board

Free Of Bond

Freight On Board

Freedom Of Bond

Question 7

Export performance of exporting units should be strengthened

Export quality should be improved

Domestic prices should be checked

All the three

Question 8

Improvement in Balance of Payment situation

Encourages exports

Discourages imports

All the three

Solution

Question 9

foreign direct investments

portfolio investments

foreign institutional investments

all the three

Question 10

it adds to external reserves of a country

it adds to internal reserves of a country

it reduces external reserves

it reduces internal reserves

User

Question Analysis

My Perfomance

Score

-

Rank

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