MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers

Check the below NCERT MCQ Questions for Class 12 Economics Chapter 6 Open Economy Macroeconomics with Answers Pdf free download. MCQ Questions for Class 12 Economics with Answers were prepared based on the latest exam pattern. We have provided Open Economy Macroeconomics Class 12 Economics MCQs Questions with Answers to help students understand the concept very well.


Q1. The operation of future delivery in the foreign exchange market is known as __

(A) Spot market
(B) Current market
(C) Forward market
(D) Domestic market

(C) Forward market


Q2. Hybrid in management of fixed and flexible exchange rate is known as __

(A) Managed to float
(B) Crawling Peg
(C) Wider Bands
(D) None of these

(A) Managed to float


Q3. When was the gold standard abandoned?

(A) 1930’s
(B) 1920’s
(C) 1940’s
(D) 1950’s

(B) 1920’s


Q4. Trade of visible items between the countries is known as __

(A) Balance of Payment
(B) Balance of Trade
(C) Deficit Balance
(D) All of these

(B) Balance of Trade


Q5. When the import and export of visible items are equal, the situation is known as _

(A) Balance of Trade
(B) Balance of Payment
(C) Trade Surplus
(D) Trade Deficit

(A) Balance of Trade


Q6. When there is a favourable balance of trade?

(A) X > M
(B) X = M
(C) X < M
(D) None of these

(A) X > M


Q7. When there is unfavourable balance of trade?

(A) X > M
(B) X = M
(C) X < M
(D) None of these

(C) X < M


Q8. The trade of visible and invisible items is known as _

(A) Balance of Payments
(B) Balance of Trade
(C) Deficit of interest
(D) Profit

(A) Balance of Payments


Q9. Other things remaining unchanged, when in a country the price of foreign currency rises, national income is:

(A) Likely to rise
(B) Likely to fall
(C) Likely to rise and fall both
(D) Not affected

(A) Likely to rise


Q10. Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely:

(A) To rise
(B) To fall
(C) To rise or to fall
(D) To remain affected

(B) To fall


Q11. Which one is the king of the exchange rate?

(a) Fixed Exchange Rate
(b) Flexible Exchange Rate
(c) Both (a) and (b)
(d) None of the above

(c) Both (a) and (b)


Q12. Which of the following is true?

(a) Fixed exchange rate is determined by the government
(b) Flexible exchange rate is determined by market forces (demand and supply of foreign exchange)
(c) Both (a) and (b)
(d) None of the above

(c) Both (a) and (b)


Q13. Which one is a kind of fixed exchange rate?

(a) Gold Standard System of Exchange Rate
(b) Bretton Woods System of Exchange Rate
(c) Both (a) and (b)
(d) None of the above

(c) Both (a) and (b)


Q14. Which one is a merit of the fixed exchange rate?

(a) Promotes Foreign Trade
(b) Induces Foreign Capital
(c) Increases Capital Formation
(d) All the above

(d) All the above


Q15. Which one is a demerit of the fixed exchange rate?

(a) Ignores National Interests
(b) Restricted Movement of Capital
(c) Sudden Fluctuations in Exchange Rates
(d) All the above

(d) All the above


Q16. Which one is a merit of the flexible exchange rate?

(a) Simple System
(b) Continuous Adjustments
(c) Improves Balance of Payments
(d) All the above

(d) All the above


Q17. Which one is a demerit of the flexible exchange rate?

(a) Bad Results of Low Rate
(b) Uncertainty
(c) Instability in Foreign Exchange
(d) All the above

(d) All the above


Q18. Which one is a source of the demand for foreign exchange?

(a) Imports of Goods and Services from Abroad
(b) Investment in Foreign Nations
(c) Gift Scheme to Foreign Nations
(d) All the above

(d) All the above


Q19. Foreign exchange is determined by:

(a) Demand for foreign currency
(b) Supply of foreign currency
(c) Demand and supply in the foreign exchange market
(d) None of the above

(c) Demand and supply in the foreign exchange market


Q20. The forms of foreign exchange market is/are:

(a) Spot market
(b) Forward market
(c) Both (a) and (b)
(d) None of these

(c) Both (a) and (b)


Q21. The foreign exchange rate is determined by:

(a) Government
(b) Bargaining
(c) World Bank
(d) Demand and Supply forces

(d) Demand and Supply forces


Q22. By exchange rate we mean:

(a) How much local currency we have to pay for a foreign currency
(b) How much of a foreign currency we have to pay for another foreign currency
(c) The rate at which foreign currency is bought and sold
(d) All of these

(d) All of these


Class 12 Macroeconomics MCQ with Answers: Introductory Macroeconomics

Chapter 1: Introduction to Macroeconomics
Chapter 2: National Income Accounting
Chapter 3: Money and Banking
Chapter 4: Determination of Income and Employment
Chapter 5: Government Budget and the Economy
Chapter 6: Open Economy Macroeconomics

Class 12 Economics Indian Economic Development MCQ with Answers

Chapter 1: Indian Economy on the Eve of Independence
Chapter 2: Indian Economy 1950-1990
Chapter 3: Liberalisation, Privatisation and Globalisation: An Appraisal
Chapter 4: Poverty
Chapter 5: Human Capital Formation in India
Chapter 6: Rural Development
Chapter 7: Employment: Growth, Informalisation and Other Issues
Chapter 8: Infrastructure
Chapter 9: Environment and Sustainable Development
Chapter 10: Comparative Development Experiences of India and its Neighbours

Unit 6: Development Experience (1947-90) and Economic Reforms Since 1991
Unit 7: Current Challenges Facing Indian Economy
Unit 8: Development Experience of India: A Comparison with Neighbours

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