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Economics Mcqs 4423 MCQs [All-Courses]

Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

The exchange value of the U.S dollar is primarily determined by ?

A the rate of inflation in the United States

B the number of dollars printed by the U.S government

C the international demand and supply for dollars

D the monetary value of gold held at Fort Knox, Kentucky

Review Detailed Answer

Correct Answer: the international demand and supply for dollars

If Canada runs a balance of payments surplus and exchange rates are floating ?

A the value of other currencies will rise relative to the dollar

B the dollar will depreciate relative to other currencies

C the price of foreign goods will become cheaper to Canadians

D the price of foreign goods will rise for Canadians

Review Detailed Answer

Correct Answer: the price of foreign goods will become cheaper to Canadians

The appreciation in the value of the dollar in the early 1980s is explained by all of the following except ?

A the United States being considered a safe haven by foreign investors

B relatively high real interest rates in the United States

C confidence of foreign investors in the U.S economy

D relatively high inflation rates in the United States

Review Detailed Answer

Correct Answer: relatively high inflation rates in the United States

When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?

A an excess demand for that currency exists in the foreign exchange market

B an excess supply of the currency exists in the foreign exchange market

C the demand for foreign exchange shifts outward to the right

D the demand for foreign exchange shifts backward to the left

Review Detailed Answer

Correct Answer: an excess demand for that currency exists in the foreign exchange market

A primary reason that explains the appreciation in the value of U.S dollar would be ?

A large trade surpluses for the United States

B high inflation rates in the United States

C lack of investor confidence in U.S money policy

D high interest rates in the United States

Review Detailed Answer

Correct Answer: high interest rates in the United States

In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?

A 200 pounds

B 400 pounds

C 600 pounds

D 800 pounds

Review Detailed Answer

Correct Answer: 800 pounds

Relatively high real interest rates in the United States tend to ?

A decrease the foreign demand for dollars causing the dollar to depreciate

B decrease the foreign demand for dollars causing the dollar to appreciate

C increase the foreign demand for dollars causing the dollar to depreciate

D increase the foreign demand for dollars causing the dollar to appreciate

Review Detailed Answer

Correct Answer: increase the foreign demand for dollars causing the dollar to appreciate

If a Big Mac hamburger sells for the same dollar value in New York as in London then ?

A the inflation rate in each country will necessarily equal zero

B the inflation rate in each country will necessarily equal 1 percent

C the exchange rates are said to be fixed pegged to each other

D purchasing power parity holds

Review Detailed Answer

Correct Answer: purchasing power parity holds

The relationship between the exchange rate and the prices of tradable goods is known as the ?

A purchasing power parity theory

B asset markets theory

C monetary theory

D balance of payments theory

Review Detailed Answer

Correct Answer: purchasing power parity theory

Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?

A 0.67 pesos = $1

B 0.8 pesos = $1

C 1.25 pesos = $1

D 1.67 pesos = $1

Review Detailed Answer

Correct Answer: 0.67 pesos = $1

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

The exchange value of the U.S dollar is primarily determined by ?

If Canada runs a balance of payments surplus and exchange rates are floating ?

The appreciation in the value of the dollar in the early 1980s is explained by all of the following except ?

When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?

A primary reason that explains the appreciation in the value of U.S dollar would be ?

In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?

Relatively high real interest rates in the United States tend to ?

If a Big Mac hamburger sells for the same dollar value in New York as in London then ?

The relationship between the exchange rate and the prices of tradable goods is known as the ?

Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?