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WorksheetsQuiz 2
Total questions: 15
Worksheet time: 8mins
Marshall- Lerner condition for devaluation is
Ex+Em<1
Ex+Em>1
Ex+Em=1
Ex+Em=0
Hedging is done
to make profit
to avoid risk
to make investment
Which assumption is not correct regarding Mundell - Fleming Model
open economy
Perfect capital mobility
r=r*
Closed economy
In Mundell- Fleming Model, Which policy is effective under Fixed Exchange Rate system?
Fiscal policy only
Monetary Policy only
Both Fiscal and Monetary
None
Absolute purchasing power parity theory is also known as
Law of one price
Law of two price
Both law of one price and law of two price
PPP theory of exchange rate determination was given by
Keynes
Solow
Gustav Cassel
Mundell
Exchange Rate overshooting model was given by
Gustav Cassel
Dornbush
Mankiw
Hicks
The condition of Golden level of capital is
Net MPK =n+g
MPK=n+g
MPK- δ > n+g
MPK=0
Economies that start off poor subsequently grow faster than economies that start off rich and tend to catch up with the world's rich economies. This property is called
Divergence
Convergence
Both Divergence and Convergence
Transition
Solow model is an endogenous model
True
False
The Condition At steady state in Solow model is
Investment =Breakeven Investment
True
False
An agreement to buy or sell a specified amount of a foreign currency at a specified future date at a rate agreed upon today is called
Spot rate
Both spot and Forward rate
Forward rate
Speculation is opposite of
Arbitrage
Hedging
Investment
Saving
Due to devaluation ,Exports
Falls
Rises
The level of capital that maximize steady state consumption is called
Silver rule level
Steady state level
Golden rule steady state level
