A depreciation of the Pakistani rupee, other conditions remaining unchanged, is most likely to:
Correct answer: B. Make imports more expensive and exports more competitive
- A. Make imports cheaper and exports more expensive
- B. Make imports more expensive and exports more competitive
- C. Reduce the rupee value of foreign debt
- D. Eliminate the country's trade deficit immediately
Explanation
A weaker rupee raises the domestic price of imported goods and can make Pakistani goods cheaper for foreign buyers. It does not automatically remove a trade deficit because trade quantities adjust with time.
Last updated
About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
Practise Economy of Pakistan
38 free Economy of Pakistan MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Economics questions like this
Economics is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
Related questions
A demographic dividend is most likely when a country has:
A general rise in prices caused mainly by higher fuel, wage or raw material costs is called:
A government's fiscal deficit is most accurately described as the excess of:
A persistent increase in the share of government revenue devoted to interest payments most directly reduces the funds available for:
A primary budget balance differs from the overall fiscal balance because it excludes: