Question : The market rate of exchange also reveals information about the _____.
Option 1: Slope of PPC
Option 2: Slope Indiiffrecne Curve
Option 3: The slope of budget line
Option 4: None of the above
Correct Answer: The slope of budget line
Solution : The slope of the budget line, which is the ratio of the price of good X to the price of good Y, is the marginal rate of exchange. The marginal rate of substitution, on the other hand, is the slope of the indifference curve that measures the units of good y sacrificed to gain one additional unit of good x. Hence C will be the correct option.
Question : Marginal rate of exchange also denotes:
Option 1: Slope of Demand Curve
Option 2: Slope of budget line
Option 3: Slope of IC Curve
Question : The price line is equivalent to:
Option 1: Budget line
Option 2: Iso-cost line
Option 3: MR Curve under perfect competition
Option 4: PPC curve
Question : It refers to the rate at which currency is exchanged for others.
Option 1: Foreign exchange
Option 2: Foreign exchange market
Option 3: Foreign exchange rate
Option 4: None of the above.
Question : It refers to a system in which foreign exchange rate is determined by market forces in central bank influence the exchange rate.
Option 1: Fixed exchange rate system
Option 2: Flexible exchange rate system
Option 3: Managed floating rate system
Question : The indifference curve's slope is calculated using:
Option 1: Marginal Rate of Substitution
Option 2: Marginal Opportunity Cost
Option 3: Marginal Rate of Transformation
Option 4: None of these
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