Economics MCQs

Page No. 168

If the EU imposes a quota on the importing of clothing produced in China, so reducing UK imports of clothing Which of the following is true regarding the market for foreign currency exchange ?


aThe demand for pounds decreases and the pound depreciates


b The Supply of pounds increases, and the pound depreciates


cThe Supply of pounds decreases, and the pound appreciates


d The demand for Pounds increases and the pound appreciates



An increasing in Europe’s taste for UK produced Hondas would cause the pound to ?


adepreciate and would increase UK net exports


bappreciate and would increase UK net exports


cdepreciate and would decrease UK net exports


dappreciate, but the total value of UK net export stays the same



An increase in the government budget deficit ?


a has no impact on the real interest rate and fails to crowed out investment


b decreases the real interest rate and crowds out investment


cNone of these answers


d Increases the real interest rate and crowds out investment



Capital flight ?


adecreases a country’s net exports and increases its long-run growth path


b increases a country’s net exports and increases its long-run growth path


c increases a country’s net exports and decreases its long-run growth path


ddecreases a country’s net exports and decreases its long-run growth path



Which of the following groups would be most harmed by a UK government budget deficit ?


aForeigners who wish to buy assets in the UK


bBAe Systems wishing to sell aircraft to Saudi Arabia


cUK residents wishing to buy foreign Produced cars


dLenders of loanable funds



An example of a trade policy is ?


aA tariff on sugar


bAll are examples of trade policy


c capital flight because it increases a country’s net exports


dan increase in the government budget deficit because it reduces a country’s net exports


View Answer A tariff on sugar

An increase in Pakistan’s private saving ?


aincrease Pakistan’s net exports and Pakistan’s net capital outflow the same amount


b Increase Pakistan’s net exports and decrease Pakistan’s net capital outflow


c decreases Pakistan’s net exports and Pakistan’s net capital outflow the same amount


d decrease Pakistan’s net exports and increase Pakistan’s net capital outflow



Suppose, due to political instability, Russians suddenly choose to purchase UK assets as opposed to Russian assets Which of the following statements is true regarding the value of the pound and UK net exports ?


a The pound appreciates, and UK net exports rise


bThe pound appreciates, and UK net exports fall


cThe pound depreciates, and UK net exports rise


dThe pound depreciates, and UK net exports fall



If the EU imposes a quota on the importing of clothing produced in China, so reducing UK imports of clothing, which of the following is true regarding UK net exports ?


aNet exports will rise


bNone of these answers


c Net exports will fall


d Net exports will remain unchanged



Which of the following statements regarding the market for foreign currency exchange is true ?


a An increase in Pakistan’s net capital outflow increase the supply of rupees and the rupees depreciate


bAn increase in Pakistan’s net capital outflow increase the demand of rupees and the rupees appreciate


cAn increase in Pakistan’s net capital outflow increase the demand of rupees and the rupees depreciate


dAn increase in Pakistan’s net capital outflow increase the supply of rupees and the rupees appreciate



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