Classical

Advanced Questions - Section 2

21:  

A capital account surplus might be expected to cause a current account deficit because the associated

A.

capital outflow would cause the nation's currency to depreciate, contributing to a trade deficit

B.

capital inflow would cause the nation's currency to depreciate, contributing to a trade deficit

C.

capital inflow would cause the nation's currency to appreciate, contributing to a trade deficit

D.

capital outflow would cause the nation's currency to appreciate, contributing to a trade deficit

 
 

Option: C

Explanation :


22:  

Which exchange rate system does not require monetary reserves for official exchange rate intervention

A.

floating exchange rates

B.

pegged exchange rates

C.

managed floating exchange rates

D.

dual exchange rates

 
 

Option: A

Explanation :


23:  

Historically, countries at early stages of rapid economic development have tended to experience

A.

trade deficits and an excess of investment over domestic saving

B.

trade surpluses and an excess of investment over domestic saving

C.

trade deficits and an excess of domestic saving over investment

D.

trade surpluses and an excess of domestic saving over investment

 
 

Option: A

Explanation :


24:  

In some cases assessment year and previous year can be same financial year.

A.

True

B.

False

C.

Cannot be said with certainty

D.

Is decided by the Assessing Officer

 
 

Option: A

Explanation :


25:  

Currency speculation is ____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations.

A.

destabilizing

B.

stabilizing

C.

inflationary

D.

deflationary

 
 

Option: B

Explanation :




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