12th Standard CBSE - Economics - Foreign Exchange Rate and Balance of Payments

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Question - 1

............... is a situation when 'managed floating' is exercised by the central bank.

  • A crawling peg
  • B Spot market 
  • C Dirty Floating
  • D None of these

Question - 2

In case of currency appreciation, the domestic currency becomes........ . 

  • A less valuable
  • B more valuable
  • C rise
  • D fall

Question - 3

Which items in Balance of payments are also called 'above the line' items?

  • A Autonomous items
  • B Accommodating items
  • C visible items
  • D invisible items

Question - 4

Balance of payments deficit is calculated by taking into account the ............... only.

  • A accommodating transactions
  • B autonomous transactions
  • C unilateral transactions
  • D None of the above

Question - 5

What is the difference between the value of exports and value of imports of goods called?

  • A Balance of payments
  • B Foreign exchange
  • C Balance of Trade
  • D Disequilibrium

Question - 6

Which items are excluded in BOT, but included in BoP?

  • A Visible items
  • B Invisible items
  • C Private capital
  • D Both (b) and (c)

Question - 7

Balance of Trade refers to balance of exports and imports of:

  • A Visible items
  • B Invisible items
  • C Both
  • D None

Question - 8

The exchange rate determined by the free play of the forces of demand and supply of foreign exchange is:

  • A Flexible Exchange Rate
  • B Fixed Exchange Rate
  • C Managed Floating
  • D None

Question - 9

Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely: (Choose the correct alternative).

  • A to rise
  • B to fall
  • C to rise or to fall
  • D to remain unaffected

Question - 10

If the price of 1 US$ has fallen from Rs 56 to Rs 52, the Indian currency has:

  • A Depreciated
  • B Appreciated
  • C Devalued
  • D None