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Free CFA Economics Practice Questions & Answers

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Question 31

A profitable carry trade most likely occurs when:

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Question 32

A carry trade involves borrowing in a currency with:

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Question 33

The main risk of a carry trade is:

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Question 34

A persistent current account deficit puts downward pressure on a currency because:

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Question 35

A country with a large trade surplus is likely to experience:

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Question 36

A country’s currency may weaken even with a trade surplus if:

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Question 37

A currency tends to strengthen when:

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Question 38

A country with rapidly rising inflation is likely to see:

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Question 39

A currency may appreciate even when GDP growth slows if:

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Question 40

A country with strong productivity growth and low inflation is likely to experience:

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Question 41

A currency may weaken despite high interest rates if:

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Question 42

Under a floating exchange rate system, the currency value is primarily determined by:

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Question 43

A central bank that wants to weaken its currency in a floating system would most likely:

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Question 44

A central bank unexpectedly raises interest rates. What is the most likely short‑term effect on the currency?

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Question 45

A central bank expands the money supply aggressively. What is the most likely impact on the currency?

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Question 46

A country with high inflation and loose monetary policy is likely to experience:

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Question 47

If a central bank raises interest rates but signals future cuts, the currency may:

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Question 48

A central bank that wants to reduce currency volatility should most likely:

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Question 49

Expansionary fiscal policy (higher government spending) tends to:

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Question 50

A country running large fiscal deficits for many years may eventually see its currency:

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Question 51

A country with low debt and strong fiscal discipline is likely to experience:

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Question 52

A government increases spending while the central bank tightens monetary policy. The currency impact is:

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Question 53

A monetary model of exchange rates predicts depreciation when:

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Question 54

In a monetary model, a permanent increase in money supply leads to:

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Question 55

The monetary model assumes that:

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Question 56

A key limitation of monetary models is that:

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Question 57

A monetary expansion causes the currency to overshoot in the short run when:

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Question 58

The portfolio balance approach emphasizes:

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Question 59

According to the portfolio balance model, a currency may appreciate if:

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Question 60

A country with rising debt but stable interest rates may still see its currency fall because:

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Free CFA Economics Practice Questions & Answers

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Before you go, can we ask you one thing?

Thank you