Question : Which of the following is not a factor that affects the exchange rate?
Option 1: Interest rates
Option 2: Inflation rates
Option 3: Government spending
Option 4: Political stability
Correct Answer: Government spending
Solution : The correct answer is (c) Government spending
Government spending is not a direct factor that affects the exchange rate. While government spending can have indirect effects on the economy and, in turn, influence factors that affect the exchange rate, it is not a direct determinant of the exchange rate.
Question : Which of the following is not a factor that affects the capital account balance?
Option 2: Political stability
Option 3: Domestic savings rates
Option 4: Exchange rates
Question : Which of the following is not a factor that affects the current account balance?
Option 1: Trade policies
Option 2: Exchange rates
Option 3: Domestic inflation rates
Option 4: Domestic interest rates
Question : Which of the following factors does not affect foreign exchange rates?
Option 1: Inflation rates
Option 2: Interest rates
Option 3: Political stability
Option 4: Weather conditions
Question : Which of the following is not a type of exchange rate system?
Option 1: Fixed exchange rate system
Option 2: Floating exchange rate system
Option 3: Managed exchange rate system
Option 4: Inflation targeting exchange rate system
Question : Which of the following is not a factor that affects a country's current account balance?
Option 1: Exchange rates
Option 2: Income levels
Option 3: Tariffs and trade barriers
Option 4: Domestic savings rates
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