Economics MCQ Class 12 Chapter 6: Check the below NCERT MCQ Questions for Economics MCQ Class 12 Chapter 6 with Answers Pdf free download. Economics MCQ Class 12 Chapter 6 Questions for Economics with Answers were prepared based on the latest exam pattern. We have provided Economics MCQ Class 12 Chapter 6 with Answers to help students understand the concept very well.

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Economics MCQ Class 12 Chapter 6

1. 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

2. 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

3. The price of one currency in terms of another is known as _________.
(A) Foreign exchange rate
(B) Trade rate
(C) Interest rate
(D) Balance of Payment

4. Which of the following is true?
(a) Fixed exchange rate is determined by the government
(b) Flexible exchange rate is determined by market forces (demand and supply of foreign exchange)
(c) Both (a) and (b)
(d) None of the above

5. The market where the national currencies are traded for one another is known as ________.
(A) Domestic exchange market
(B) Foreign exchange market
(C) Bazaar
(D) Shop

6. Which one is a demerit of the fixed exchange rate?
(a) Ignores National Interests
(b) Restricted Movement of Capital
(c) Sudden Fluctuations in Exchange Rates
(d) All the above

7. Increase in the value of foreign commodities is known as _________.
(A) Revaluation
(B) Devaluation
(C) Inflation
(D) None of these

8. Which one is a merit of the flexible exchange rate?
(a) Simple System
(b) Continuous Adjustments
(c) Improves Balance of Payments
(d) All the above

9. Decrease in the value the foreign commodities is known as _________.
(A) Revaluation
(B) Devaluation
(C) Deflation
(D) All of these

10. Balance of Trade =?
(a) Export of Visible Items – Imports of Visible Items
(b) Export of both Visible and Invisible Items – Import of both Visible and Invisible Items
(c) Import of Visible Items – Export of Visible Items
(d) None of the above

11. What is the cause of the devaluation of any country’s currency?
(A) Increase in the domestic inflation rate
(B) Domestic real interest rates are less than foreign interest rates
(C) Much increase in the income
(D) All of these

12. Which items are included in the Balance of Payments?
(a) Visible Items
(b) Invisible Items
(c) Capital Transfers
(d) All the above

13. 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

14. Which one is the feature of Balance of Payment?
(a) Systematic Accounts
(b) Fixed Time Period
(c) Comprehensiveness
(d) All the above

15. 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

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