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International Finance and Treasury MCQ Questions and Solutions with Explanations | Management

International Finance and Treasury MCQ Questions and answers with easy and logical explanations. Management provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. International FinanceMCQ is important for exams like MAT, CAT, CA, CS, CMA, CPA, CFA, UPSC, Banking and other Management department exam. Page-2 section-6

Each section contains 100 MCQs on International Finance and Treasury .
11
For specific basket of goods and services, rise in price on continual basis is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
For specific basket of goods and services, rise in price on continual basis is considered as inflation. For specific basket of goods and services, rise in price on continual basis is considered as inflation.
12
When interest rate is higher than equilibrium rate of borrowing loanable funds then financial system has
Discuss
Answer & Solution
Answer: Option C
Solution:
When interest rate is higher than equilibrium rate of borrowing loanable funds then financial system has surplus of funds. The demand for loanable funds represents the behavior of borrowers and the quantity of loans demanded. The lower the interest rate, the less expensive it is to borrow.
13
If equilibrium interest rate decreases with respect to decrease in interest rate, then movement along supply of funds curve is
Discuss
Answer & Solution
Answer: Option B
Solution:
If equilibrium interest rate decreases with respect to decrease in interest rate, then movement along supply of funds curve is downside movement. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
14
Plant and equipment are examples of
Discuss
Answer & Solution
Answer: Option A
Solution:
Plant and equipment are examples of long term fixed assets. The term fixed assets generally refers to the long-term assets, tangible assets used in a business that are classified as property, plant and equipment.
15
Monetary expansion decreases and there is increase in equilibrium interest rate then supply curve of funds must shift
Discuss
Answer & Solution
Answer: Option C
Solution:
Monetary expansion decreases and there is increase in equilibrium interest rate then supply curve of funds must shift up and to left. Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. That increases the money supply, lowers interest rates, and increases aggregate demand. It boosts growth as measured by gross domestic product.
16
Sum of past deficit of budget if accumulated is considered as
Discuss
Answer & Solution
Answer: Option B
Solution:
Sum of past deficit of budget if accumulated is considered as national debt.
17
According to demand for funds curve, demand curve shifts down and to left if there is decrease in
Discuss
Answer & Solution
Answer: Option D
Solution:
According to demand for funds curve, demand curve shifts down and to left if there is decrease in equilibrium interest rate. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
18
Loans for cars and home appliances is classified as loans for
Discuss
Answer & Solution
Answer: Option A
Solution:
Loans for cars and home appliances is classified as loans for durable goods. Durable goods are those goods that don't wear out quickly and last over a long period.
19
When business companies started investing with funds generated internally is a point which shows that
Discuss
Answer & Solution
Answer: Option A
Solution:
When business companies started investing with funds generated internally is a point which shows that cost of loanable funds is high. Loanable funds is the sum total of all the money people and entities in an economy have decided to save and lend out to borrowers as an investment rather than use for personal consumption.
20
Interest rate considering compounding of interest rate and is earned in 12 months is considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
Interest rate considering compounding of interest rate and is earned in 12 months is considered as effective annual return. Effective annual return (EAR) is the annual rate that captures the magnifying effect of multiple compounding periods per year of an investment.