Foreign Exchange Market

IMPORTANT

Foreign Exchange Market: Overview

This topic covers concepts, such as, Gold Standard, Exchange Rates in the Long Run, International Monetary Fund and Managed Floating etc.

Important Questions on Foreign Exchange Market

MEDIUM
IMPORTANT

The value of US Dollar $1 has gone down from ₹73 to ₹70. It means that:

EASY
IMPORTANT

What is the meaning of forward market?

HARD
IMPORTANT

Explain the relationship between the fall in the price of a US Dollar ($) and its demand. 

HARD
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'Recently Indian Rupee () has depreciated significantly. This has lead to distress for Indian importers'. Defend or refute the given statement with valid reasons.

HARD
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"Indian Rupee (₹) plunged to all time low of 74.48 against the US Dollar ($)".-The Economic Times

In the light of the above report, discuss the impact of the situation on Indian Imports.

HARD
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Why does the demand for foreign currency fall and supply rises when its price rises?

HARD
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How does giving incentives for exports influence foreign exchange rate? Explain.

HARD
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Visits to foreign countries for sightseeing etc. by the people of India is on the rise. What will be its likely impact on the foreign exchange rate and how?

HARD
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Recently Government of India has doubled the import duty on gold. What impact is it likely to have on the foreign exchange rates and how?

MEDIUM
IMPORTANT

Under 'Floating Exchange Rate System, exchange rate is determined by:

MEDIUM
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Identify which of the following statements is true?

MEDIUM
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By 'Exchange Rate' we mean:

MEDIUM
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If ₹74 are required to buy $1,instead of ₹70 earlier,it means:

MEDIUM
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Under Managed Floating Exchange Rate System, if rupee is getting depreciated fast then RBI:

MEDIUM
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When there is appreciation of currency:

HARD
IMPORTANT

Explain by giving examples, the distinction between depreciation and devaluation of domestic currency.

HARD
IMPORTANT

Give the meaning of 'foreign exchange' and 'Foreign exchange rate'. Giving reason explain the relationship between foreign exchange rate and demand for foreign exchange.

MEDIUM
IMPORTANT

Due to the depreciation of foreign currency, the supply of foreign currency in the domestic economy will:

MEDIUM
IMPORTANT

If 70 are required to buy 1US$, instead of 68, It will lead to rise in:

MEDIUM
IMPORTANT

The value of US Dollar $1 has gone down from ₹73 to ₹70. It means that: