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Exports of goods and services raises the of foreign exchange.

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Important Questions on Open Economy Macroeconomics

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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
The value of US Dollar $1 has gone down from ₹73 to ₹70. It means that:
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
_____is one of the most important sources of demand for foreign currency.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
A change from ₹190=2£  to ₹100=1£ indicates that Indian Rupees_____(Loses/Gains) its value in relation to British Pound.
EASY
Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Which among the following institutions are major participants in the foreign exchange market?
HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Choose one merit and demerit of the fixed exchange rate from the following options.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
_____of Indian rupees will occur when ₹75 have to be paid to exchange one US $ instead of the present rate of ₹70/$.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
How does a country’s foreign exchange reserves impact its economic stability and international trade relations?
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Other things remaining unchanged, when price of foreign currency rises in a country, then national income is likely to_____.
HARD
Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Which of the following is correct in the context of foreign exchange and foreign exchange rate?
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
If government decides exchange rate of foreign currency, it is called_____exchange rate system.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
What are the benefits of the flexible exchange rate system?
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
What factors determine the flow of foreign exchange in the country?
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Under_____exchange rate system, each country fixes its value of currency in terms of some external standard.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Which among the following refers to a system in which the foreign exchange rate is determined by market forces and the central bank influences the exchange rate through intervention.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Under managed floating rate system_____maintains reserves of foreign exchange.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
_____refers to reduction in price of domestic currency in terms of all foreign currencies under fixed exchange rate regime.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
A change from ₹190=£2 to ₹ 90= £1 indicates that ₹ is_____
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
Demand for American goods will_____in India due to appreciation of Indian currency.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market
If the exchange rate of the home currency rises, the value of exports of the economy is likely to_____.
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Economics>Macroeconomics>Open Economy Macroeconomics>Foreign Exchange Market

An increase in demand for foreign goods and services indicate which of the following?