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Chapter 27: The balance of payments and...
Multiple choice questions

These interactive self-assessment questions, will enable you to assess your understanding of the core material covered in Chapter 27 of Economics for Business, third edition.

After you have clicked on your choice of answer to each question, you can submit your answers for instant automated marking and feedback.

1 .       The record of a country's transactions in goods, services, and assets with the rest of the world is its: 



2 .       The difference between a country's merchandise exports and its merchandise imports is the: 



3 .       The balance of payments is divided into two major accounts, the: 



4 .       Which of the following statements is correct? 



5 .       Which of the following statements is TRUE? 



6 .       The difference between the balance on current account and the balance on financial account is/are the: 



7 .       The price of one country's currency in terms of another country's currency is the: 



8 .       All currencies other than the domestic currency of a given country are referred to as: 



9 .       Between 1944 and _____ most world exchange rates were fixed. 



10 .       In 1971, most countries: 



11 .       Exchange rates that are determined by the unregulated forces of supply and demand are: 



12 .       If the Bank of England reduces the money supply to reduce inflation, a floating exchange rate will aid the Bank of England in fighting inflation because: 



13 .       Expansionary monetary policy: 



14 .       A fiscal expansion in the UK: 



15 .       The fall in value of one currency relative to another is: 



16 .       The rise in value of one currency relative to another is: 



17 .       Which of the following is NOT an advantage of fixed exchange rates? 



18 .       Under a system of floating exchange rates, there is a general tendency for: 



19 .       If a nation's interest rates are relatively low compared to those of other countries, then the exchange value of its currency will tend to: 



20 .       Which of the following is NOT an advantage of freely floating exchange rates? 



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