International Economics MCQs and Notes

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📊 International Economics
Q. Given a system of floating Exchange rates, falling income in the United States would trigger:
  • (A) An increase in the demand for imports and an increase in the demand for foreign currency
  • (B) An increase in the demand for imports and a decrease in the demand for foreign currency
  • (C) A decrease in the demand for imports and an increase in the demand for foreign currency
  • (D) A decrease in the demand for imports and a decrease in the demand for foreign currency
💬 Discuss
✅ Correct Answer: (D) A decrease in the demand for imports and a decrease in the demand for foreign currency
📊 International Economics
Q. Under a fixed exchange rate system, a contractionary fiscal policy leads to a worsening in a nation’s balance-of-payments position if the resulting:
  • (A) Trade-account deficit more than offsets the capital-account surplus
  • (B) Trade-account deficit more than offsets the capital-account deficit
  • (C) Capital-account deficit more than offsets the trade-account surplus
  • (D) Capital-account deficit more than offsets the trade-account deficit
💬 Discuss
✅ Correct Answer: (C) Capital-account deficit more than offsets the trade-account surplus
📊 International Economics
Q. What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world?
  • (A) Trade deficit
  • (B) Capital Budget
  • (C) Foreign imports
  • (D) Balance of Payments or BoP
💬 Discuss
✅ Correct Answer: (D) Balance of Payments or BoP
📊 International Economics
Q. An increase in foreign income generally leads to:
  • (A) increased exports, increased domestic output
  • (B) decreased exports, increased domestic output
  • (C) decreased exports, decreased domestic output
  • (D) increased exports, decreased domestic output
💬 Discuss
✅ Correct Answer: (A) increased exports, increased domestic output
📊 International Economics
Q. The Gold Standard was prevalent in the world from:
  • (A) 15th century to 18th century
  • (B) 9th century to 18th century
  • (C) From 1870 till First World War
  • (D) From 1670 till First World War
💬 Discuss
✅ Correct Answer: (C) From 1870 till First World War
📊 International Economics
Q. When the exchange rate is determined by the market forces of demand and supply, it is known as :
  • (A) Real exchange rate
  • (B) Nominal exchange rate
  • (C) Superfluous exchange rate
  • (D) Floating exchange rate
💬 Discuss
✅ Correct Answer: (D) Floating exchange rate
📊 International Economics
Q. Which among the following is taken as the real measure of a country's international competitiveness?
  • (A) Real exchange rate
  • (B) Nominal exchange rate
  • (C) Superfluous exchange rate
  • (D) None of the above
💬 Discuss
✅ Correct Answer: (A) Real exchange rate
📊 International Economics
Q. The ratio of foreign rates to domestic rates measured in the 'same' currency is known as:
  • (A) Real exchange rate
  • (B) Nominal exchange rate
  • (C) Superfluous exchange rate
  • (D) None of the above
💬 Discuss
✅ Correct Answer: (A) Real exchange rate
📊 International Economics
Q. The records of exports and imports in goods and services and transfer payments is known as
  • (A) Current account
  • (B) Budget surplus
  • (C) Economic leakage
  • (D) degree of openness
💬 Discuss
✅ Correct Answer: (A) Current account
📊 International Economics
Q. Which among the following could be said to be an 'Open Economy'?
  • (A) A nation that follows the doctrine of Free-market and Laissez-faire economics
  • (B) A nation that trades with other nations in goods and services and financial assets
  • (C) An economy that operates without government intervention
  • (D) None of the above
💬 Discuss
✅ Correct Answer: (A) A nation that follows the doctrine of Free-market and Laissez-faire economics

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