Foreign exchange & BOP

The Increase in the value of domestic currency in relation to foreign currency due to fluctuations in the foreign exchange rate is

• Devaluation

• Appreciation

• Depreciation

• None of the above

Due to appreciation of domestic currency

• Exports rise

• Imports rise

• Imports falls

• None on the above

The decrease in the value of foreign exchange rate which is done intentionally by the government is called

• Appreciation

• Depreciation

• Devaluation

• Revaluation

Revaluation takes place under which system?

• Flexible exchange rate system

• Fixed exchange rate system

• Managed floating exchange rate system

• None of the above

Appreciation takes place under which system?

• Fixed exchange rate system

• Flexible exchange rate system

• Managed floating exchange rate system

• None of the above

The value of US Dollar $1 has fallen form Rs. 70 to Rs. 68. It means:

• Currency is depreciated

• Currency is appreciated

• Both (a) and (b)

• None of the above

Floating exchange rate system is also known as

• Fixed exchange rate system

• Free exchange rate system

• Flexible exchange rate system

• Both (b) and (c)

The supply curve of foreign exchange rate is

• Horizontal line parallel to x- axis

• Vertical line parallel to y- axis

• Slope downwards

• Slope upwards

Due to decrease in demand of foreign currency, there is

• Appreciation

• Depreciation

• Devaluation

• Revaluation

Due to increase in supply of foreign currency, there in

• Appreciation

• Depreciation

• Devaluation

• Revaluation