Students of class 12 Economics should refer to MCQ Questions Class 12 Economics Open Economy Macroeconomics with answers provided here which is an important chapter in Class 12 Economics NCERT textbook. These MCQ for Class 12 Economics with Answers have been prepared based on the latest CBSE and NCERT syllabus and examination guidelines for Class 12 Economics. The following MCQs can help you to practice and get better marks in the upcoming class 12 Economics examination

Chapter 12 Open Economy Macroeconomics MCQ with Answers Class 12 Economics

MCQ Questions Class 12 Economics Open Economy Macroeconomics provided below have been prepared by expert teachers of grade 12. These objective questions with solutions are expected to come in the upcoming Standard 12 examinations. Learn the below provided MCQ questions to get better marks in examinations.

Question. Balance of Trade means :
(a) Capital Transaction
(b) Import and export of goods
(c) Total debit and credit
(d) All the above

Question. Which one is the visible item of Balance of Payments?
(a) Machine
(b) Cloth
(c) Cement
(d) All of these 

Question. Which among the following is a source of supply of foreign exchange?
(a) Donations given
(b) Imports
(c) Exports
(d) Gifts 

Question. 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 

Question. 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

Question. 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 

 Question. Increase in the value of foreign commodities is known as _________
(a) Revaluation
(b) Devaluation
(c) Inflation
(d) None of these 

Question. Measures to improve adverse balance of payment includes :
(a) Currency devaluation
(b) Import substitution
(c) Exchange control
(d) All of the above.

Question. 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 

Question. The records of exports and imports in goods and services and transfer payments is known as
(a) Current account
(b) Budget surplus
(c) Economic leakage
(d) degree of openness

Question. 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 

Question. Which one is the item of Capital Account?
(a) Government Transaction
(b) Priva Transactions
(c) Foreign Direct Investment
(d) All the above 

Question. The foreign exchange rate is determined by:
(a) Government
(b) Bargaining
(c) World Bank
(d) Demand and Supply forces

 Question. The Gold Standard was prevalent in the world from:
(a) 15th century to 18th century
(b) 9th century to 18th century
(c) From 1870 till First World War
(d) From 1670 till First World War 

Question. Which one is a merit of fixed exchange rate ?
(a) Promotes Foreign Trade
(b) Induces Foreign Capital
(c) Increases Capital Formation
(d) All the above 

Question. Foreign exchange transactions dependent on other foreign exchange transactions are called:
(a) Current account transactions
(b) Capital account transactions
(c) Autonomous transactions
(d) Accommodating transactions

Question. 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 

Question. 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 

Question. The forms of foreign exchange market is/are :
(a) Spot market
(b) Forward market
(c) Both (a) and (b)
(d) None of these 

Question. Structure of balance of payment includes which account:
(a) Current account
(b) Capital account
(c) Both (a) and (b)
(d) None of these. 

Question. Which account is included in the composition of Balance of Payments ?
(a) Current Account
(b) Capital Account
(c) Both (a) and (b)
(d) None of the above 

Question. The operation of daily nature in the foreign exchange market is known as
(a) Spot market
(b) Forward market
(c) Domestic market
(d) International market 

Question. The exchange rate at which demand for foreign currency becomes equal to its supply,is called:
(a) Equal rate of exchange;
(b) Unequal rate of exchange;
(c) Equilibrium rate;
(d) All of these

Question. 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

Question. When there is a favourable balance of trade?
(a) X > M
(b) X = M
(c) X < M
(d) None of these 

Question. Types of Foreign Exchange Market are:
(a) Spot market
(b) Forward market
(c) Both (a) and (b)
(d) None of these 

Question. If Rs 150 are required to buy $ 2, instead of Rs100 earlier, then:
(a) Domestic currency has depreciated;
(b) Domestic currency has appreciated;
(c) Rupee value of import bill will increase;
(d) Both (a) and (c) 

Question. 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 

Question. Which of the following is a merit of the fixed exchange rate?
(a) Ensures the supply of the fixed exchange rate
(b) Ensures the demand for the fixed exchange rate
(c) Ensures the stability for the fixed exchange rate
(d) None

We hope the above multiple choice questions for Class 12 Economics for Chapter 12 Open Economy Macroeconomics provided above with answers based on the latest syllabus and examination guidelines issued by CBSE, NCERT and KVS are really useful for you. Open Economy Macroeconomics is an important chapter in Class 12 as it provides very strong understanding about this topic. Students should go through the answers provided for the MCQs after they have themselves solved the questions. All MCQs have been provided with four options for the students to solve. These questions are really useful for benefit of class 12 students. Please go through these and let us know if you have any feedback in the comments section.