The _____ states that exchange rates between any two currencies will adjust to reflect changes in the price levels of the two countries

• theory of purchasing power parity
• law of one price
• theory of money neutrality
• quantity theory of money

If a country experiences a ______ in productivity relative to other countries, its currency will _____because the cost of producing goods _______.

• rise; appreciate; increases
• rise; depreciate; decreases
• decline; depreciate; increases
• decline; depreciate; decreases

When the nation lets the exchange market take care of the exchange rate by letting the value of its currency drop until exchange market equilibrium is restored, it is said to adopt.

• Fixed exchange rate
• Flexible exchange rate
• Floating exchange rate
• None of the above

If the nominal interest rate is 4.5% and the inflation rate is 1.2%, then calculate the Real Interest Rate

• 5.3%
• 3.3%
• 5.7%
• 1%

If you want a 5% real interest rate and the expected inflation rate is 4%, you should set the nominal interest at:

• 1%
• 4%
• 9%
• 20%

The Indian rupee is fully convertible: 1. In respect of current account transactions 2. In respect of capital account transactions 3. In respect of transaction of gold Which of the statements given above is/are correct?

• 1 only
• 3 only
• 1 and 2
• 1, 2 and 3

Foreign Exchange and Foreign currencies in India are governed by

• RBI
• Banking Regulation Act
• FEMA Act
• SEBI Act

In primary markets, the first time issued shares to be publicly traded, in stock markets is considered as

• traded offering
• public markets
• issuance offering
• initial public offering

_________ is the official export certification body of India which ensures quality and safety of products exported from India.

• Indian Trade Promotion Organization (ITPO)
• Indian Institute of Foreign Trade (IIFT)
• Export Inspection Council (EIC)
• Export Promotion Councils (EPCs)

______ is an umbrella term for economic policies, development interventions and private initiatives aimed at improving the trade performance of the country.

• Economic development
• Import promotion
• Trade promotion
• Trade area