Balance of Payments-Foreign Exchange Rate (CBSE Class-12 Economics): Questions 1 - 12 of 18

Get 1 year subscription: Access detailed explanations (illustrated with images and videos) to 523 questions. Access all new questions we will add tracking exam-pattern and syllabus changes. View Sample Explanation or View Features.

Rs. 900.00 or

Question number: 1

» Balance of Payments » Foreign Exchange Rate

Short Answer Question▾

Write in Short

Give two reasons for a rise in demand for a foreign currency when its price falls.

Question number: 2

» Balance of Payments » Foreign Exchange Rate

Short Answer Question▾

Write in Short

List three sources each of demand and supply of foreign exchange

Question number: 3

» Balance of Payments » Foreign Exchange Rate

One Liner Question▾

Write in Brief

State two sources of supply of foreign currency.

Question number: 4

» Balance of Payments » Foreign Exchange Rate

One Liner Question▾

Write in Brief

The price of 1 US Dollar has fallen from Rs. 50 to Rs. 48. Has the Indian currency appreciated or depreciated?

Question number: 5

» Balance of Payments » Foreign Exchange Rate

One Liner Question▾

Write in Brief

What is meant by foreign exchange rate?

Question number: 6

» Balance of Payments » Foreign Exchange Rate

Short Answer Question▾

Write in Short

State any two merits and demerits of flexible exchange rate system.

Question number: 7

» Balance of Payments » Foreign Exchange Rate

Appeared in Year: 2011

Essay Question▾

Describe in Detail

When price of a foreign currency rises, its supply also rises. Explain why?

Explanation

When the price of foreign currency rises then the domestic goods have become cheaper for the foreign residents because they can buy more goods and services with same worth of foreign currency. So, the foreign demand for domestic products rises. This conducts increase in the exports of domestic country. So,… (60 more words) …

Question number: 8

» Balance of Payments » Foreign Exchange Rate

Appeared in Year: 2011

Essay Question▾

Describe in Detail

When price of a foreign currency rises, its demand falls. Explain why?

Explanation

When the price of foreign currency rises then it involve that foreign goods have become expensive for the domestic residents of the country. This results in a fall in the demand for foreign goods by the domestic residents. So, the demand for foreign currency falls.

For example, suppose the rupee-dollar… (50 more words) …

Question number: 9

» Balance of Payments » Foreign Exchange Rate

Appeared in Year: 2012

One Liner Question▾

Write in Brief

Give meaning of managed floating exchange rate.

Question number: 10

» Balance of Payments » Foreign Exchange Rate

Essay Question▾

Describe in Detail

How is foreign exchange rate determined? Use diagram.

Explanation

Conversion rate of one currency into another. This rate depends on the local demand for foreign currencies and their local supply to country’s trade balance and strength of its economy.

We assume that there are two countries, India and America, the exchange rate of their currencies is to be decided.… (156 more words) …

Question number: 11

» Balance of Payments » Foreign Exchange Rate

Essay Question▾

Describe in Detail

What is foreign exchange market? How is foreign exchange rate determined in this market?

Explanation

The foreign exchange market is a global but not centralized market for the trading of currencies. Volume of trading, it is by far the largest market in the world. The main participants in this market are the larger international banks.

In that we assume that there are two countries, India… (233 more words) …

Question number: 12

» Balance of Payments » Foreign Exchange Rate

Short Answer Question▾

Write in Short

Define flexible exchange rate system.

Sign In