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"There exists a positive relation between foreign exchange rate and supply of foreign exchange." Do you agree with the given statement ? Justify your answer with valid arguments.
“Under the flexible exchange rate system, the Central Bank does not intervene in the foreign exchange market.” Justify the statement, giving valid arguments. Explain the impact of home currency depreciation on the exports of a nation.
Identify, which of the following is not a source of supply of foreign exchange for India. (Choose the correct alternative)
Read the items given in Columns I and II carefully and choose the correct pair of statements from the given alternatives. Alternatives :
Discuss briefly the determination of exchange rate under the flexible exchange rate system.
Read the following statements carefully : Statement 1 : Depreciation of domestic currency may lead to a rise in exports. Statement 2 : Due to the depreciation of Indian National Rupee (Rs.), purchasing power of US Dollar ($) may increase. In light of the given statements, choose the correct alternative from the following :
Identify, which one of the following is an intangible item in Balance of Payment (BoP).
"The central bank needs to intervene under the managed floating system." Do you agree with the given statement ? Support your answer with valid reasons. Differentiate between Surplus in Balance of Trade and Current Account Surplus.
"Considering the depreciation of Indian Currency (Rs.) in the international market, the Reserve Bank of India (RBI) has decided to purchase Indian currency (Rs.) in the open market." This represents ______ exchange rate system. (Fill up the blank with correct alternative)
Suppose, the price of one UK Pound (£) has increased from Rs. 70 to Rs. 80, owing to market forces. This means that value of Indian Currency (Rs.) has ______. (Choose the correct alternative)
Suppose, Country X, has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant ? (Choose the correct alternative)
Distinguish between fixed exchange rate system and flexible exchange rate system.
Identify which of the following is not one of the merits of fixed exchange rate system.
Discuss any two factors which directly affect the demand for foreign exchange of a nation.
Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below : Assertion (A) : Ceteris Paribus, Devaluation of domestic currency leads to an increase in National Income of a nation. Reason (R) : Devaluation of domestic currency refers to reduction in the value of domestic currency with respect to foreign currency, under the fixed exchange rate system. Alternatives :
Identify, which of the following is not a source of demand for foreign exchange for Indian economy ? (Choose the correct alternative.)
Under the ______ Exchange Rate System, the Central Bank can control the rise / fall of foreign exchange rate in a range bound manners. (Fill up the blank with correct alternative.)
Under the ________ Exchange Rate System, the Central Bank can control the rise / fall of foreign exchange rate in a range bound manners. (Fill up the blank with correct alternative.)
Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below : Assertion (A) : Ceteris Paribus, Devaluation of domestic currency leads to an increase in National Income of a nation. Reason (R) : Devaluation of domestic currency refers to reduction in the value of domestic currency with respect to foreign currency, under the fixed exchange rate system.
From the following, identify the correct reasons that may affect the supply of foreign exchange in an economy : I. Purchase of land in England by an Indian II. Foreign tourists visiting Taj Mahal III. Donation of $ 500 million from Microsoft IV. Indian students going to Australia for studies Alternatives :
Read the following statements carefully : Statement-1 : Managed floating exchange rate system is an amalgamation of fixed and flexible exchange rate system. Statement-2 : Managed floating exchange rate system is also known as 'hybrid system'. In the light of the given statements, choose the correct option from the following :
Under the __________ Exchange Rate System, the Central Bank can control the foreign exchange rate in a range bound manner. (Choose the correct option to fill in the blank)
Read the following statements carefully : Statement 1 : Import of heavy machinery from Japan is a source of demand for foreign exchange. Statement 2 : Financial aid by International Bank for Reconstruction and Development (IBRD) for landslide in Wayanad (Kerala) is a source of supply of foreign exchange. In the light of the given statements, choose the correct option from the following :
Market forces of demand and supply, actively interact under ________ exchange rate system to determine the foreign exchange rate. (Choose the correct option to fill in the blank)
Market forces of demand and supply, actively interact under __________ exchange rate system to determine the foreign exchange rate. (Choose the correct option to fill in the blank)
Read the following statements – Assertion (A) and Reason (R) carefully. Choose the correct option from those given below : Assertion (A) : Other things remaining constant, devaluation of domestic currency may lead to rise in National Income of the nation. Reason (R) : Devaluation of domestic currency refers to reduction in the value of domestic currency by the government with respect to foreign currency under the fixed exchange rate system.
Identify, which of the following is not a source of demand for foreign exchange. (Choose the correct option)
Read the following statements carefully : Statement 1 : The price of a given currency in terms of another is known as bank rate. Statement 2 : Demand curve for foreign exchange is a downward sloping curve. In the light of the given statements, choose the correct option from the following :
Read the following statements carefully : Statement 1 : Keeping other things constant, there exists positive correlation between the price of foreign exchange and its demand. Statement 2 : The foreign exchange rate indicates a country's purchasing power in international markets. In the light of the given statements, choose the correct option from the following :
Read the following statements carefully : Statement 1 : Depreciation of currency is an economic action undertaken by the government of a nation under the fixed exchange rate system. Statement 2 : Under the floating exchange Rate system, authorities actively intervene in the foreign exchange market by way of maintaining foreign exchange reserves. In the light of the given statements, choose the correct option from the following :
Read the following statements carefully : Statement 1 : Under the flexible exchange rate system, a deficit / surplus in the Balance of Payments is automatically corrected. Statement 2 : Under the flexible exchange rate system, there is always a possibility of over/under valuation of currency. In the light of the above given statements, choose the correct option from the following :
Read the following statements - Assertion (A) and Reason (R). Choose the correct option from those given below : Assertion (A) : Increase in exchange rate implies that the price of foreign currency in terms of domestic currency has increased. Reason (R) : Balance of trade records the inflows and outflows of foreign exchange.
Identify, the factor which influences the demand for foreign exchange in a country. (Choose the correct option)
Under the fixed exchange rate system, if the government decreases the value of domestic currency with respect to a foreign currency, it is known as __________ of currency. (Choose the correct option to fill in the blank)
"Many Multinational Corporations (MNCs) have recently shifted their production from China to India, which has boosted the `Make in India' plan." Assuming other factors being constant, discuss the effects of the given statement on foreign exchange rates with reference to the Indian economy.
Keeping other factors constant, explain how a spending of foreign tourists in the home country and fees payments of overseas students affect the demand and supply of foreign exchange.
Under ___________ exchange rate system, the competent authority may devalue currency to increase exports. (Choose the correct option to fill in the blank)
Under the flexible exchange rate system, the exchange rate is determined by the ___________ . (i) Government (ii) Demand and supply (iii) Intervention of the Central Bank (Choose the correct option to fill in the blank)
Read the items given in Columns I and II carefully and choose the correct pair of statements from the given alternatives. Alternatives : | Column I | | Column II i. | Export of software by an Indian company | 1. | Demand of foreign currency ii. | Accommodating nature of transactions | 2. | Profit motive iii. | Autonomous nature of transactions | 3. | Non-Profit motive iv. | Loan forwarded to Sri Lanka during its economic crisis | 4. | Supply of foreign exchange
In light of the given statements, choose the correct alternative from the following :
In the light of the above given statements, choose the correct option from the following :