20000+ Important MCQs for AIR FORCE

1) Exchange rates are flexible and fiscal policy is held constant. A Contractionary monetary policywill be

2) In a floating exchange rate system:

3) To prevent the external value of its currency rising the government could:

4) A fall in the external value of a currency:

5) Which of the following is NOT an argument for a country allowing its currency to float freely?

6) Starting from a position of internal and external balance, a reduction in
aggregate demand will cause a current account _____________

7) A rise in the real exchange rate will ____________ the competitiveness of the domestic economy

8) Within the circular flow of income, an increase in domestic income will tend to increase

9) Perfect international capital mobility suggests that international funds will be responsive to _____________ differentials

10) When capital mobility is perfect, interest rate differentials will tend to be offset by ________