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External Sector and International Organizations 01
Question
1
of 15
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Q1. IMF is the result of-
A.
Hawana conference
B.
Rome conference
C.
Brettonwood conference
D.
Geneva conference
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
The International Monetary Fund (IMF) and the World Bank were created at the Bretton Woods Conference in 1944.
Q2. Currency value in relation to US dollar was lowest in July 2016 for?
A.
India
B.
Pakistan
C.
Sri Lanka
D.
Bangladesh
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
During that specific week in 2016 the Sri Lankan Rupee faced the most significant depreciation compared to the others listed.
Q3. Which of the following includes bulk imports of the country?
A.
Petroleum
B.
Electrical Goods
C.
Non-electrical Machinery
D.
Precious Stones
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Petroleum Oil and Lubricants (POL) have historically been the largest component of India's import bill.
Q4. Devaluation of currency will be more beneficial if
A.
prices of domestic goods constant
B.
prices of exports remain constant
C.
prices of imports constant
D.
prices of exports rise proportionately
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
Devaluation works if it makes exports cheaper in the foreign market while export prices remain stable domestically.
Q5. The Currency Convertibility concept in its original form is originated in
A.
Taylors agreement
B.
Wells agreement
C.
Bretton Woods agreement
D.
Symmonds agreement
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
C
The Bretton Woods system established the framework for currency exchange and international finance post-WWII.
Q6. Devaluation of a currency means
A.
reduction in value vis-a-vis internationally traded currencies
B.
permitting market seek worth
C.
fixing value via basket
D.
multilateral consultation with IMF
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Devaluation is a deliberate downward adjustment of a country's currency value relative to another currency.
Q7. After European Union which another group adopted common currency?
A.
OPEC
B.
Gulf Countries
C.
SAARC
D.
ASEAN
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
The GCC (Gulf Cooperation Council) nations have held long-term plans for a single currency (Khaleeji).
Q8. Devaluation of the currency is associated with
A.
Reduction in the value of currency
B.
Increase in the value of currency
C.
Both (A) and (B)
D.
None of these
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
Devaluation is the deliberate reduction of the value of a country's currency relative to foreign currencies.
Q9. Devaluation of currency leads to?
A.
fall in domestic prices
B.
increase in domestic prices
C.
cant be predicted
D.
None of above
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
Devaluation makes imports more expensive, which often causes an upward pressure on domestic price levels.
Q10. Mistry Committee recommended full capital account convertibility by
A.
2008 end
B.
2009 end
C.
2010 end
D.
2011 end
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
A
The Percy Mistry Committee report on making Mumbai an International Financial Centre discussed convertibility targets.
Q11. The term ‘Paper Gold’ refers to:
A.
Gold Bonds
B.
Special Drawing Rights (SDRs)
C.
Currencies tied to gold
D.
White Gold
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
SDRs are international reserve assets created by the IMF and are often called 'Paper Gold'.
Q12. A ‘Closed Economy’ is an economy in which:
A.
The money supply is controlled
B.
Deficit financing takes place
C.
Only exports take place
D.
Neither exports nor imports take place
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
D
A closed economy does not trade with the outside world (no foreign trade).
Q13. The headquarters of Asian Development Bank (ADB) is located in:
A.
Singapore
B.
Manila
C.
Tokyo
D.
Bangkok
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
The ADB is headquartered in Mandaluyong, Metro Manila, Philippines.
Q14. What does ‘EPZ’ stand for?
A.
Economic Processing Zone
B.
Export Processing Zone
C.
Export Promotion Zone
D.
External Public Zone
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
Export Processing Zones are areas aimed at enhancing exports by providing incentives and infrastructure.
Q15. What is the tenure of the Foreign Trade Policy in India (Standard)?
A.
3 years
B.
5 years
C.
7 years
D.
10 years
ANSWER & SOLUTION
MARK FOR REVIEW
Correct Answer:
B
Typically, the Foreign Trade Policy is framed for a five-year period.
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