The 'International Fisher Effect' relates exchange rate changes to: MCQ with Answer and Explanation

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The 'International Fisher Effect' relates exchange rate changes to:

A. interest rate differentials

B. reserve levels

C. inflation differentials

D. trade balances

Answer: Option A

Solution (By JKSSB Mock Tests)

The International Fisher Effect suggests currencies with higher nominal interest rates will depreciate due to inflation.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'effective revenue deficit' was introduced in the budget of which year?

A. 2008-09

B. 2011-12

C. 2009-10

D. 2014-15

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Correct Answer: Option C

Explanation:
The concept of effective revenue deficit was introduced in the Union Budget 2009-10.

This question belongs to: Economy GK Economy Set 1

Question #2

The term 'Most Favoured Nation' treatment under WTO implies:

A. Non-discriminatory treatment among all member countries

B. Preferential treatment to one country at the expense of others

C. Higher tariffs for all members

D. Complete free trade without any rules

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Correct Answer: Option A

Explanation:
The MFN principle requires that any trade advantage granted to one WTO member must be extended to all other members, ensuring non-discrimination.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Permanent Establishment' concept in international taxation determines:

A. permanent bank accounts

B. permanent employment

C. permanent residency of individuals

D. where a foreign enterprise has taxable presence

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Correct Answer: Option D

Explanation:
Permanent establishment determines a foreign enterprise's taxable presence in a country.

This question belongs to: Economy GK Economy Set 1

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