50+ Foreign Exchange Market MCQ’s | (Free Resource) Business Economics

51. PPP Theory considers that goods in different countries are _______ .
a) Identical
b) differential
c) superior
d) non of the above

52. PPP Theory ignores capital flows on account of _________ .
a) capital account
b) trade account
c) current account
d) none of the above

53. There is a _______ relationship between demand for foreign currency and the exchange rate.
a) inverse
b) direct
c) straight
d) positive

54. There is a _______ relationship between supply of foreign currency and the exchange rate.
a) direct
b) inverse
c) negative
d) indirect

55. LERMS was introduced in India in ________ .
a) 1992
b) 2000
c) 2002
d) 2012

56. Under managed float, the central bank of a nation intervenes to ________ foreign currency.
a) purchase and sell
b) only purchase
c) only sale
d) none of the above

57. Under flexible exchange rate system, the exchange rate is determined by ________ .
a) market forces
b) central bank
c) commercial banks
d) none of the above

58. Under IMF, the exchange rate system was ______ .
a) gold standard
b) currency board system
c) dollarization
d) none of the above)