The 'Uncovered Interest Parity' condition states that: MCQ with Answer and Explanation

Question

Share Report Error

The 'Uncovered Interest Parity' condition states that:

A. expected exchange rate changes offset interest rate differentials

B. interest rates are equal across countries

C. inflation rates are equal across countries

D. capital flows are zero

Answer: Option A

Solution (By JKSSB Mock Tests)

Uncovered interest parity says the expected exchange rate change equals the interest rate differential.

This question belongs to: Economy GK Economy Set 1

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Economy Set 1 Questions

Question #1

The 'General Budget' in India was separated from the Railway Budget in which year?

A. 1947

B. 1921

C. 1924

D. 1950

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option C

Explanation:
Railway Budget was separated from the General Budget in 1924 on the Acworth Committee recommendation.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of elasticity, a perfectly inelastic demand curve is:

A. Upward sloping

B. Horizontal

C. Downward sloping with unit elasticity

D. Vertical

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option D

Explanation:
A perfectly inelastic demand curve is a vertical straight line, indicating that quantity demanded does not change at all with changes in price.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Special Drawing Right' value is calculated based on a basket of currencies that includes which five currencies?

A. US dollar, euro, yen, pound, yuan

B. US dollar, euro, yen, pound, rupee

C. US dollar, euro, franc, pound, yuan

D. US dollar, euro, rupee, pound, yen

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option A

Explanation:
The SDR basket comprises US dollar, euro, Chinese yuan, Japanese yen and British pound.

This question belongs to: Economy GK Economy Set 1

Explore All Economy Set 1 MCQs