INTERNATIONAL FINANCE - MARCH 2015 (MCQS)

T.Y B.COM

SEMESTER - 6

INTERNATIONAL FINANCE

(IF) 

MCQS = MARCH 2015

(1) On the balance of payments merchandise imports are classified in the .......... account.

(a) Current

(b) Capital

(c) Official settlement 

(d) None of the above

(2) In BOP the transaction of direct investment in foreign countries pertains to the account of

(a) Official settlement

(b) current

(c) foreign exchange

(d) capital 

(3) The relationship between the exchange rate and the prices of tradable goods is known as

(a) Asset-maker theory

(b) Monetary theory

(c) PPP theory 

(d) BOP Theory

(4) In Marshall-Lerner condition deals with the impact of currency depreciation on

(a) Service goods

(b) Domestic liquidity 

(c) Relative prices 

(d) PPP theory

(5) Which of the following is true for the J-curve effect in the long run?

(a) Demand tends to be most elastic 

(b) Demand tends to be most inelastic

(c) Applies to interest rate effect

(d) Applies to income effect 

(6) The ............. effect suggest that following currency depreciation a country's trade balance Worsens for a period before it improves

(a) Marshall-Lerner

(b) J - curve 

(c) Price

(d) Income 

(7) A nation experiences external balance if it achieves 

(a) An increase in its money supply 

(b) No change in its international gold stock

(c) An increase in interest rate

(d) Equilibrium in its BOP

(8) identify the most outdated instrument of external payments

(a) Bank draft 

(b) Letter of credit 

(c) Telegraphic transfer

(d) Bills of exchange

(9) The developing country gains if the price elasticity of demand for export is

(a) Inelastic 

(b) Elastic

(c) Unit elastic 

(d) None of the above

(10) A country will experience deficit tendency in BOP if there is

(a) Right shift in both demand & supply

(b) Right shift in supply

(c) Left shift in demand

(d) None of the above

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