Banking and Finance 2 MCQs and Notes

B
Add MCQ, ...................................
📊 Banking and Finance 2
Q. Anything that increases the demand for foreign goods relative to domestic goods tends to _____ the domestic currency because domestic goods will only continue to sell well if the value of the domestic currency is _____.
  • (A) depreciate; lower
  • (B) depreciate; higher
  • (C) appreciate; lower
  • (D) appreciate; higher
💬 Discuss
✅ Correct Answer: (A) depreciate; lower
📊 Banking and Finance 2
Q. Lower tariffs and quotas cause a country’s currency to _____ in the _____ run.
  • (A) depreciate; short
  • (B) appreciate; short
  • (C) depreciate; long
  • (D) appreciate; long
💬 Discuss
✅ Correct Answer: (C) depreciate; long
📊 Banking and Finance 2
Q. Higher tariffs and quotas cause a country’s currency to _____ in the _____ run.
  • (A) depreciate; short
  • (B) appreciate; short
  • (C) depreciate; long
  • (D) appreciate; long
💬 Discuss
✅ Correct Answer: (D) appreciate; long
📊 Banking and Finance 2
Q. In the foreign exchange market, if the interest rate on foreign deposits increases, holding everything else constant,
  • (A) The expected return schedule for foreign deposits shifts to the right.
  • (B) The dollar depreciates.
  • (C) The foreign currency appreciates.
  • (D) All of the above.
💬 Discuss
✅ Correct Answer: (D) All of the above.
📊 Banking and Finance 2
Q. An agreement to exchange dollar bank deposits for euro bank deposits in one month is a
  • (A) Spot transaction.
  • (B) Future transaction.
  • (C) Forward transaction.
  • (D) Monthly transaction.
💬 Discuss
✅ Correct Answer: (C) Forward transaction.
📊 Banking and Finance 2
Q. The immediate (two-day) exchange of one currency for another is a
  • (A) Forward transaction.
  • (B) Spot transaction.
  • (C) Money transaction.
  • (D) Exchange transaction.
💬 Discuss
✅ Correct Answer: (B) Spot transaction.
📊 Banking and Finance 2
Q. Exchange rates are determined in
  • (A) The money market.
  • (B) The foreign exchange market.
  • (C) The stock market.
  • (D) The capital market.
💬 Discuss
✅ Correct Answer: (B) The foreign exchange market.
📊 Banking and Finance 2
Q. In the long run, ________ affect the exchange rate.
  • (A) relative price levels
  • (B) tariffs and quotas
  • (C) productivity
  • (D) All of the above.
💬 Discuss
✅ Correct Answer: (D) All of the above.
📊 Banking and Finance 2
Q. The foreign exchange market
  • (A) Is organized as an over-the-counter market in which several hundred dealers stand ready to buy and sell deposits denominated in foreign currencies.
  • (B) Is very competitive.
  • (C) Functions no differently from a centralized market.
  • (D) All of the above.
💬 Discuss
✅ Correct Answer: (D) All of the above.
📊 Banking and Finance 2
Q. When the value of the British pound changes from $1.50 to $1.25, the pound has ________ and the dollar has ________.
  • (A) appreciated; appreciated
  • (B) depreciated; appreciated
  • (C) appreciated; depreciated
  • (D) depreciated; depreciated
💬 Discuss
✅ Correct Answer: (B) depreciated; appreciated

More Faculties

Click on sub category to learn more.

📱 Download Our App

Learn MCQs on the go with our easy-to-use Android app

Get it on Google Play