Foreign Exchange-ECONOMICS

FOREX is

• Foreign currency

• Foreign country

• a Share market

FOREX RATE is

• Domestic currency

• Value of domestic currency in terms of foreign currency

• foreign currency

Under which system Demand and supply for FOREX determines the exchange rate

• Flexible exchange rate

• Fixed exchange rate

• Both

Managed floating system is

• flexible system of exchange rate

• mixture of fixed exchange rate and fixed exchange rate

• A system managed by a foreign country

Depreciation is

• Fall in the value of domestic currency in terms of foreign currency

• Rise in the value of domestic currency in terms of foreign currency

• none

Devaluation is

• Fall in the value of domestic currency in terms of foreign currency as a deliberate step adopted by the govt. under Fixed exchange rate system

• Rise in the value of domestic currency in terms of foreign currency as a deliberate step adopted by the govt. under Fixed exchange rate system

• Fall in the value of domestic currency in terms of foreign currency as a deliberate step adopted by the govt. under FLEXIBLE exchange rate system

Appreciation of domestic currency will

• Encourage imports

• Encourage Exports

• Discourage imports

Under flexible system exchange rate is determined where

• Demand for FOREX=Supply of FOREX

• Demand for Forex > Supply of FOREX

• By Government

Which of the following is a source of FOREX supply

• Imports

• Exports

• Direct purchase in abroad

Stability is a merit of

• Fixed exchange rate system

• Flexible exchange rate system

• Both