mochyn wrote:You have to accept the facts in the book even if they are wrong as some of the correct answers in the test are not right
I think that's probably right.
To the OP, in terms of your first question (constitutional monarchy versus parliamentary democracy versus constitutional democracy), the UK is all three, although the third term is not one that I have particularly heard before. If I were asked, I'd put the first one.
Regarding your third question (about overseas driving licenses), I'd be surprised — though I stand to be corrected — if the test asked you about the minutiae of who can exchange a driving licence for a UK one and who can't. That is hardly relevant to day-to-day "life in the UK". (A question might be how long one can drive in the UK on a non-UK licence — although for most people taking the test, that piece of information will be coming too late!)
Anyway, good luck with test.