Macroeconomic Issues & Analysis Mcqs - Set 6

1)   If the economy is in the though phase of the business cycle, aggregate demand ____ unemployment ______ inflation ______ and the current account of the balance of payments is likely to move towards ________?

a. falls; falls; falls; surplus
b. falls; rises; falls; surplus
c. is static; low; rises; deficit
d. rises; falls; rises; deficit
Answer  Explanation 

ANSWER: falls; falls; falls; surplus

Explanation:
No explanation is available for this question!


2)   If the economy is at the peak of the business cycle, aggregate demand ____ unemployment _______ inflation _______ and the current account of the balance of payments is likely to move towards _______?

a. rise; falls; rise; deficit
b. falls; rises; falls; surplus
c. falls; falls; falls; surplus
d. is static; low; rises; deficit
Answer  Explanation 

ANSWER: is static; low; rises; deficit

Explanation:
No explanation is available for this question!


3)   If a large car importer in the Pakistan wants to import many cars, then the exchange value of the Pak rupees will tend to ?

a. fluctuate more than it would do otherwise
b. appreciate
c. depreciate
d. not be affected
Answer  Explanation 

ANSWER: depreciate

Explanation:
No explanation is available for this question!


4)   If Pakistan’s incomes rise faster than those in most other countries the the exchange value will tend to ?

a. fluctuate more than it would do otherwise
b. appreciate
c. depreciate
d. not be affected
Answer  Explanation 

ANSWER: depreciate

Explanation:
No explanation is available for this question!


5)   If the Pakistan takes part in a war in the Middle East, then the exchange value of its currency will tend to ?

a. depreciate
b. not be affected
c. fluctuate more than if it were at peace
d. appreciate
Answer  Explanation 

ANSWER: depreciate

Explanation:
No explanation is available for this question!


6)   If the exchange rate between the UK and Japan changes from £1 = 100 yen to £1 = 150 yen then ceteris paribus, the price of UK goods in Japan ?

a. will remain the same
b. will decrease
c. will increase
d. could either increase of decrease
Answer  Explanation 

ANSWER: will increase

Explanation:
No explanation is available for this question!


7)   The situation when a country imports more than it exports is ?

a. a recession
b. a trade surplus
c. a trade deficit
d. an expansion.
Answer  Explanation 

ANSWER: a trade deficit

Explanation:
No explanation is available for this question!


8)   The record of a county’s transfers of shareholding property and bank deposits to and from abroad is called its ?

a. financial account on the balance of payments.
b. balance of payments
c. balance of payments on current account
d. capital account of the balance of payments
Answer  Explanation 

ANSWER: financial account on the balance of payments.

Explanation:
No explanation is available for this question!


9)   The record of country’s imports and exports of goods and services is called its ?

a. visible trade balance
b. balance of trade
c. balance of payments on current account
d. balance of payments.
Answer  Explanation 

ANSWER: balance of trade

Explanation:
No explanation is available for this question!


10)   An economy that trades with and has financial dealing with other countries is called a/an ________ economy?

a. free-trade
b. autarkic
c. open
d. mixed
Answer  Explanation 

ANSWER: open

Explanation:
No explanation is available for this question!