Macro Economics MCQ (GK Set-1) with Answers

Macro Economics MCQ (GK Set-1) with Answers

91) To understand the current nominal exchange rate, we need to know all of the following except

Answer is:

last period’s nominal exchange rate

92) Suppose the following bilateral spot exchange rates are being quoted for the Danish krone (DKK), the US dollar (US$) and the euro: US$/’ = 1.5 DKK/’ = 7.0 DKK/$ = 5.0 If you start with 100’, the most you could end up with in a single

Answer is:

107.14

93) (A) ____ interest rate parity involves (B) _ domestic and foreign interest rates and the spot and the (C) ________ exchange rates

Answer is:

(A) Covered; (B) riskless; (C) forward

94) Over the long run the rate of depreciation of the nominal exchange rate between two countries is approximately equal to the difference in national _________ rates.

Answer is:

inflation

95) The rational expectations hypothesis does not imply:

Answer is:

Policy makers have better information about the economy than other economic actors

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