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Home  arrow Student Resources  arrow Chapter 24: The Balance of Payments and Exchange Rates  arrow Multiple choice questions

Multiple choice questions

Try the multiple choice questions below to test your knowledge of this chapter. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

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This activity contains 20 questions.

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

 
End of Question 1


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

 
End of Question 2


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

 
End of Question 3


Question 4.
Which of the following statements is correct?

 
End of Question 4


Question 5.
Which of the following statements is TRUE?

 
End of Question 5


Question 6.
The difference between the balance on current account and the balance on capital account is the:

 
End of Question 6


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

 
End of Question 7


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

 
End of Question 8


Question 9.
The agreements that were reached at the Bretton Woods conference in 1944 established a system:

 
End of Question 9


Question 10.
In 1971, most countries:

 
End of Question 10


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

 
End of Question 11


Question 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:

 
End of Question 12


Question 13.
Expansionary monetary policy:

 
End of Question 13


Question 14.
A fiscal expansion in the UK:

 
End of Question 14


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

 
End of Question 15


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

 
End of Question 16


Question 17.
The theory of international exchange that holds that exchange rates adjust to offset differences in countries' inflation rates is the:

 
End of Question 17


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

 
End of Question 18


Question 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:

 
End of Question 19


Question 20.
The J-curve effect refers to the observation that:

 
End of Question 20





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