INTERNATIONAL FINANCE (MCQS)

T.Y B.COM

SEMESTER - 6

INTERNATIONAL FINANCE

(IF)

MCQS = FEBRUARY - 2016

(1) Devaluation has adverse effects; it Increases the cost of production of those Commodities which use

(A) Imported Raw Material

(B) Domestic Capital

(C) Domestic labor 

(D) Imported Grants

(2) Which of these is not a component of long term capital account of BOP ?

(A) Private portfolio investment

(B) Private direct investment

(C) foreign government donations to home country in the event of a natural calamity

(D) Government loans for foreign governments

(3) Which of these dose not constitute demand for foreign exchange.

(A) foreign earnings from export of goods

(B) Unilateral transfer payments

(C) Deposits in overseas banks

(D) Payment for foreign goods

(4) _______ Records net Changes in foreign exchange reserves of a Country.

(A) Unilateral transfer account

(B) International liquidity account

(C) Long term capital account

(D) Services Account

(5) Which of these shows an incorrect sequence of automatic mechanism of restoring BOP equilibrium ?

(A) BOP deficit - gold outflow - rise in money supply - fall in prices - rise in exports - fall in imports - BOP equilibrium

(B) BOP deficit - gold outflow - fall in money supply - rice in interest rates - fall in investments - fall in national income - fall in imports - BOP equilibrium

(C) BOP surplus - gold inflow - rise in money supply - rise in prices - fall in exports - rise in Imports - BOP equilibrium

(D) BOP deficit - gold outflow - fall in money supply - fall in prices - rise in exports - fall in imports - BOP equilibrium

(6) The rate of exchange between two national currencies in the _______ in which two currencies are exchanged. 

(A) Ratio

(B) Elasticity

(C) Settlement

(D) market

(7) Under the flexible exchange rate system, the exchange rate is determined by _______

(A) Monetary authority of India

(B) Interest rates

(C) Price of gold

(D) Forces of DD & SS in foreign exchange Market

(8) Which of these is not an autonomous transaction ?

(A) An Indian Settled in US remits $100 a month to her parents in India.

(B) Standard Chartered Bank in India repatriates $300 mn of its Profits to UK. (C) India borrows $100 mn from the World Bank to Construct a highway. 

(D) India exports gold worth $400 mn to settle it's BOP deficit.

(9) The clean float exchange rate refers to _______ Intervention in the foreign exchange market.

(A) No Government

(B) No Public

(C) No Legal

(D) No foreign

(10) The deficit in the BOP can be corrected by _______

(A) Adopting policy to decrease credit worthiness of the country

(B) Expansionary money supply

(C) The cooperation from the world bank

(D) Devaluation of the currency

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