Free Macroeconomics MCQs with Answers

• A. Free float
• B. Clean float
• C. Both of them
• D. None of them

Explanation: A clean float is an exchange-rate arrangement in which the government does not intervene in the foreign-exchange market.

• A. Financial markets of developing economies
• B. Financial markets of East Europe's economies
• C. Financial markets of Asian economies
• D. Financial markets of Latin America

Explanation: Emerging markets are the financial markets of developing or rapidly industrialising economies that are becoming more integrated with…

• A. Deflector
• B. Purchasing power parity
• C. Inflator
• D. Deflation

Explanation: A price deflator converts nominal or current-price values into real, inflation-adjusted values.

• A. To write-off debt
• B. To reschedule debt
• C. To repay debt in easy installments
• D. The complete repayment of debt

Explanation: Debt retirement means extinguishing a debt, normally by repaying the principal in full or otherwise settling the obligation.

• A. International economic risk
• B. Country economic risk
• C. Ultra-country economic risk
• D. Outcome risk

Explanation: Country economic risk is the possibility that changes in a nation’s economy, such as recession, inflation, or exchange-rate instability…

• A. Free movement of capital and labor
• B. Free movement of goods and services
• C. Both of them
• D. None of them

Explanation: A common market removes restrictions on trade in goods and services and also allows the movement of production factors such as labour and…

• A. Nationalist policy
• B. Domestic policy
• C. Protectionist policy
• D. Beggar-thy-beighbour

Explanation: Beggar-thy-neighbour policy seeks to improve one country’s position at the expense of trading partners, often through competitive…

• A. Liberalism
• B. Free market economics
• C. Supply-side economics
• D. Supervised market

Explanation: Supply-side economics seeks to expand production by improving incentives to work, invest and produce, including through tax reductions.

• A. Holdings
• B. Reserves
• C. Foreign currency
• D. Treasure

Explanation: A country’s internationally acceptable payment assets, such as foreign currencies and monetary gold, are its reserves.

• A. Power to buy foreign currency
• B. Foreign currency holding
• C. Ratio at which unit of one country's currency is exchanged for unit of another country currency
• D. None of them

Explanation: The exchange rate expresses the ratio at which one nation’s currency can be exchanged for another nation’s currency.

• A. Domestication
• B. Protectionism
• C. Localization
• D. National interest

Explanation: Protectionism uses tariffs, quotas or similar restrictions to shield domestic producers from foreign competition.

• A. Promissory Note (PN)
• B. Note of hand
• C. Both of them
• D. None of them

Explanation: A promissory note is a written, unconditional promise to pay a specified amount at a stated time or on demand; a note of hand is a…

• A. In which economists control production
• B. In which production and distribution of wealth is under government's control
• C. In which technocrats control production
• D. In which government controls distribution

Explanation: In a planned economy, the government centrally directs major decisions about production and the distribution of goods and income.

• A. Open door market
• B. Open door country
• C. Open sky market
• D. Free economy

Explanation: An open-door market or policy gives traders from different countries equal access without granting exclusive monopolies or preferences.

• A. National income
• B. Public income
• C. Local income
• D. Gross income

Explanation: National income broadly measures the net value of goods and services produced by a country during a given period.

• A. Multinational corporation
• B. Multinational company
• C. Both of them
• D. None of them

Explanation: A business operating through subsidiaries, investments, or operations in several countries is a multinational enterprise.

• A. Macroeconomics
• B. Gross economics
• C. Mega economics
• D. Micro economics

Explanation: Macroeconomics studies the economy as a whole, including national income, employment, inflation, growth, and overall output.

• A. letter of Credit
• B. Letter of expression
• C. Demand draft
• D. Letter of intent

Explanation: A letter of credit, including a traveller’s letter of credit, authorizes its holder to obtain payment through an overseas branch or…

• A. Labor force
• B. Labor potential
• C. Work force
• D. All of them

Explanation: The labor force includes all adults who are employed or actively seeking employment, whether or not they currently have a job.

• A. Hyperinflation
• B. Ultra-inflation
• C. A cute inflation
• D. Super inflation

Explanation: Hyperinflation is an extremely rapid and uncontrolled rise in prices that sharply destroys the value of money.