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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.

Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?

A currency arbitrage

B interest arbitrage

C short positions

D long positions

Review Detailed Answer

Correct Answer: interest arbitrage

Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market ?

A his desire to open a bank account in Japan

B his desire to purchase an automobile produced domestically

C his desire to travel to Europe

D his desire to purchase Treasury bills issued by the British government

Review Detailed Answer

Correct Answer: his desire to purchase an automobile produced domestically

If Sweden’s currency depreciates relative to Norway’s currency ?

A Norway’s export goods become more expensive to Norway’s residents

B Norway’s exports goods become cheaper to Sweden’s residents

C Sweden’s export goods become cheaper to Norway’s residents

D Sweden’s export goods become cheaper to Sweden’s residents

Review Detailed Answer

Correct Answer: Sweden’s export goods become cheaper to Norway’s residents

The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?

A forward discount

B forward premium

C forward spread

D None of these

Review Detailed Answer

Correct Answer: forward discount

Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?

A differential actions

B cash transaction

C arbitrage

D forward transactions

Review Detailed Answer

Correct Answer: arbitrage

If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?

A 2.0

B 1.999

C 2.323

D 2.222

Review Detailed Answer

Correct Answer: 2.222

An important feature of a _______ is that the holder has the right but not the obligation to buy or sell currency ?

A Swap

B foreign exchange arbitrage

C foreign exchange option

D futures market contract

Review Detailed Answer

Correct Answer: foreign exchange option

The exchange rate is kept the same across geographically separate markets by ?

A hedging

B speculation

C government regulation

D arbitrage

Review Detailed Answer

Correct Answer: arbitrage

In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?

A upward

B vertical

C downward

D horizontal

Review Detailed Answer

Correct Answer: downward

The largest volume of foreign exchange trading takes place in ?

A China

B Germany

C United Kingdom

D USA

Review Detailed Answer

Correct Answer: United Kingdom

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?

Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market ?

If Sweden’s currency depreciates relative to Norway’s currency ?

The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?

Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?

If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?

An important feature of a _______ is that the holder has the right but not the obligation to buy or sell currency ?

The exchange rate is kept the same across geographically separate markets by ?

In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?

The largest volume of foreign exchange trading takes place in ?