The purchasing power parity exchange rate between two currencies is the rate that: MCQ with Answer and Explanation

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The purchasing power parity exchange rate between two currencies is the rate that:

A. maximizes exports

B. equalizes trade balances

C. equalizes the prices of a basket of goods across countries

D. equalizes interest rates

Answer: Option C

Solution (By JKSSB Mock Tests)

The PPP exchange rate equalizes the price of a common basket of goods across countries.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a permitted asset for Statutory Liquidity Ratio?

A. Equity shares

B. Gold and government securities

C. Mutual fund units

D. Corporate bonds

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Correct Answer: Option B

Explanation:
SLR assets include cash, gold and approved government securities.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'original sin' problem in international finance refers to:

A. inability of emerging economies to borrow abroad in their own currency

B. currency depreciation

C. high domestic debt

D. trade deficits

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Correct Answer: Option A

Explanation:
Original sin is the inability of emerging economies to borrow abroad in their own domestic currency.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Lokpal' in India is a:

A. constitutional body

B. private body

C. statutory body

D. judicial body

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Correct Answer: Option C

Explanation:
Lokpal is a statutory body established under the Lokpal and Lokayuktas Act, 2013.

This question belongs to: Economy GK Economy Set 1

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