Economics MCQs

Page No. 199

Small nations whose trade and financial relationships are mainly with a single partner tend to utilize ?


apegged exchange rates

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bfreely floating exchange rates

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cmanaged floating exchange rates

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dcrawling exchange rates

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View Answer pegged exchange rates

Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit ?


avery high rates of inflation occur domestically

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bforeigners discriminate against domestic products

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ctechnological advance is superior abroad

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d the domestic currency is undervalued relative to other currencies

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Under managed floating exchange rates if the rate of inflation in the United States is less than the rate of inflation of its trading partners the dollar will likely ?


aappreciates against foreign currencies

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bdepreciates against foreign currencies

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cbe officially revalued by the government

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dbe officially devalued by the government

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Which exchange rate mechanism in intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions ?


adual exchange rates

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bmanaged floating exchange rates

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cadjustable pegged exchange rates

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d crawling pegged exchange rates

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View Answer dual exchange rates

Which exchange rate system involves a leaning against the wind|| strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run ?


apegged of fixed exchange rates

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badjustable pegged exchange rates

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c managed floating exchange rates

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d free floating exchange rates

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Small nations with more than one major trading partner tend to peg the value of their currencies to ?


agold

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bsilver

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ca single currency

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da basket of currencies

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Which exchange rate system does not require monetary reserves for official exchange rate intervention ?


a floating exchange rates

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bpegged exchanged rates

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c managed floating exchange rates

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ddual exchange rates

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Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?


aU.S exports tend to rise, and imports tend to fall

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bU.S imports tend to rise, and exports tend to fall

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cU.S foreign exchange reserves tend to rise

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dU.S foreign exchange reserves remain constant

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Which exchange rate mechanism calls for frequent redefining of the par value by small amounts to remove a payments disequilibrium ?


adual exchange rate

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badjustable pegged exchange rates

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cmanaged floating exchange rates

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dcrawling pegged exchange rates

✓



The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is ?


a freely fluctuating exchange rates

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b adjustable pegged exchange rates

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cmanaged floating exchange rates

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dpegged or fixed exchange rates

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