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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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
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