Open Economy Macroeconomics CBSE Questions & Answers

Open Economy Macroeconomics

This is Economics Class 12 Open Economy Macroeconomics CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Balance of current account includes
  • A
    Balance of trade and balance of visibles
  • B
    None of the above
  • C
    Balance of trade and balance of invisibles
    Correct
  • D
    Balance of trade and balance of payment
2
Balance of capital account includes
  • A
    None of the above
  • B
    lending to abroad only
  • C
    Borrowings from abroad Only
  • D
    Borrowings from and lending to abroad
    Correct
3
Identify one of the types of balances in BOP account
  • A
    None of the above
  • B
    Autonomous Items
    Correct
  • C
    All visible items
  • D
    All Invisible items
4
Autonomous Items are also called
  • A
    Below the line items
  • B
    On the line items
  • C
    Above the line items
    Correct
  • D
    None of the above
5
Accommodating Items are also called
  • A
    On the line items
  • B
    Below the line items
    Correct
  • C
    Above the line items
  • D
    None of the above
6
A disequilibrium in Balance of payment can be corrected by
  • A
    Promoting imports
  • B
    Promoting exports
    Correct
  • C
    Promoting entrepot trade
  • D
    None of the above
7
A disequilibrium in Balance of payment can also be corrected by
  • A
    Appreciation
  • B
    Devaluation
    Correct
  • C
    Depreciation
  • D
    Revaluation
8
BOT is part of BOP but not vice versa. It is
  • A
    Can’t say
  • B
    Sometimes
  • C
    Never
  • D
    Always
    Correct
9
A source of supply of foreign exchange is
  • A
    Foreign tourism
    Correct
  • B
    Foreign goods
  • C
    Foreign purchases
  • D
    Foreign trade
10
A source of demand for foreign exchange is
  • A
    Speculative investments abroad
    Correct
  • B
    Smuggle of goods & services
  • C
    Export of goods & services
  • D
    Brokerage of goods & services
11
Point out a merit of fixed exchange rate
  • A
    Discourages capital movement
  • B
    None
  • C
    Promotes capital movement
    Correct
  • D
    Has no effect on capital movement
12
Point out a merit of fixed exchange rate
  • A
    None
  • B
    Prevents speculation in forex market
    Correct
  • C
    Has no effect on speculation in forex market
  • D
    promotes speculation in forex market
13
Point out a merit of fixed exchange rate
  • A
    None
  • B
    Prevents capital outflow
    Correct
  • C
    Has no effect on capital outflow
  • D
    promotes capital outflow
14
Point out a merit of fixed exchange rate
  • A
    Has no effect on inflation
  • B
    None
  • C
    Ensures to keep inflation in check
    Correct
  • D
    Prevents to keep inflation in check
15
Point out a merit of flexible exchange rate
  • A
    None
  • B
    Frees the govt from the problem of Balance of payment
    Correct
  • C
    Frees the private sector from the problem of Balance of payment
  • D
    Frees the individual from the problem of Balance of payment