Business Economics Set 12

Bachelor of Business Administration (BBA)

Practice Mode Previous Next
On This Page

This set of Business Economics Multiple Choice Questions & Answers (MCQs) focuses on Business Economics Set 12

Q1 | Transactions in the foreign exchange market are carried out are termed as _.
  • fixed rate
  • forward rate
  • exchange rate
  • Hedging
Answer: exchange rate
Q2 | Demand for foreign exchange varies _ with the exchange rates.
  • Direct
  • Negative
  • inversely
  • positive
Answer: inversely
Q3 | When supply of foreign exchange is increased given the demand for foreign exchange, the rate of exchange _.
  • decrease
  • increases
  • Direct
  • upward
Answer: decrease
Q4 | When demand for foreign exchange increases, the exchange rate _.
  • increases
  • inversely
  • decrease
  • unrelated
Answer: increases
Q5 | The relative version is considered to be _ to absolute version.
  • superior
  • Gustav Cassel
  • selection of index numbers
  • inferior
Answer: superior
Q6 | The relative version of the PPP theory is propounded by _.
  • Cassel
  • Adam Smith
  • J.S.Mill
  • Alfred Marshall
Answer: Cassel
Q7 | According to _ theory, the exchange rate between two currencies is determined by their purchasing power.
  • Purchasing Power Parity
  • Balance of payment theory
  • Mint parity theory
  • Comparative advantage theory
Answer: Purchasing Power Parity
Q8 | The -----------is the largest market in the world.
  • foreign exchange market
  • NSE
  • BSE
  • NASDAQ
Answer: foreign exchange market
Q9 | The countries of the world are following the exchange rate system.
  • fixed
  • flexible
  • restrictive
  • strict
Answer: flexible
Q10 |     _ _ is a feature of the foreign exchange market which enables an investor to earn high returns.
  • cost
  • Leverage
  • revenue
  • profit
Answer: Leverage
Q11 |         _has enabled faster growth of the foreign exchange market.
  • Technology
  • Leverage
  • Internaltrade
  • exchange rate
Answer: Technology
Q12 |     __ function refer to the function of converting one currency into another.
  • Arbitrage
  • booking
  • asking
  • hedging
Answer: hedging
Q13 |     _ are authorized to deal in foreign exchange transactions.
  • Moneylenders
  • Money launderers
  • Commercial banks
  • RRBs
Answer: Commercial banks
Q14 | Investment in financial assets like shares or bonds abroad will _- the demand for foreign exchange.
  • inceae
  • decrease
  • keep constant
  • fluctuate
Answer: inceae
Q15 | A _ country requires more foreign exchange.
  • developing
  • developed
  • hermit nation
  • restrictive
Answer: developing
Q16 | Services rendered by the domestic country to foreign counter parts increase the _ of foreign exchange.
  • supply
  • demand
  • manufacture
  • produce
Answer: supply
Q17 | Unilateral payments received _ _ the supply of foreign exchange.
  • increase
  • decrease
  • does not change
  • drastically changes
Answer: increase
Q18 |     _ rate variations can affect the equilibrium exchange rate.
  • Birth
  • death
  • inflation
  • production
Answer: inflation
Q19 | Interest rate differentials the exchange rate.
  • affect
  • tandardised
  • localise
  • neutralise
Answer: affect
Q20 | The degree of _ achieved affect the exchange rate.
  • education
  • health
  • growth
  • currency
Answer: growth
Q21 | The purchasing power parity theory the difference in the quality of goods.
  • considers
  • appreciates
  • ignores
  • values
Answer: ignores
Q22 | The PPP theory _ capital transfers.
  • considers
  • appreciates
  • ignores
  • values
Answer: ignores
Q23 | The _rate is determined by the demand for and supply of a currency.
  • spot
  • forward rate
  • option
  • futures
Answer: spot
Q24 | The differencbetween bid price and ask price s the _     
  • loss
  • profit
  • value
  • difference
Answer: profit
Q25 |     _ exchange rate may be either at a premium or discount or at par.
  • spot
  • forward
  • current
  • option
Answer: forward
Previous Next