1. The goal of fixed exchange rate is a. stable domestic currency d. (a) and (b) are correct b. stable price e. (a), (b) and (c) are correct c. stable price in international market

2. The gold standard is a. golds currency as a means of transaction d. (a) and (b) are correct b. Currency which is not convertible to gold e. (a) and (c) are correct c. Currency which is convertible to golds

3. If nominal interest rate is 5% and inflation rate is 3%, then real interest rate is a. 2% d. -2% b. 5% e. All answers are wrong c. 8%

4. For IS in open economy, an increase in government spending will lead to a. an increase in output d. (a) and (b) are correct b. trade deficit e. (a) and (c) are correct c. trade surplus

5. A decrease in government spending in open economy will lead to a. a decrease in interest rate d. (a) and (b) are correct b. a decrease in output e. all of them are correct c. a depreciation