WorksheetsForeign Exchange Rate
Total questions: 20
Worksheet time: 10mins
The rate of exchange determined by the government is called:
Floating Exchange Rate
Fixed Exchange Rate
Flexible Exchange Rate
None of these
The demand curve for foreign exchange is:-
Positively related to the rate of exchange
Not related to the rate of exchange
Proportionately related to the rate of exchange
negatively related to the rate of exchange
Which of the following causes loss of foreign exchange?
Grants from the rest of the world
Exports
Imports
All of the above
Other things remain unchanged when in a country the price of foreign currency rises, national income is:
Likely to rise
Likely to fall
Both (a) and (b)
Not affected
The gold standard system of the exchange rate is an old variant of ______.
Flexible Exchange Rate
Dirty Floating Exchange Rate
Managed Floating Exchange Rate
Fixed Exchange Rate
Identify which of the following statement is true.
Reserve bank of India is the custodian of foreign exchange reserves.
Less developed countries often devalue their currencies.
Both (a) and (b)
None of these
Decrease in the value of the domestic currency in terms of foreign currency is.
Appreciation of domestic currency
Revaluation of domestic currency
Depreciation of domestic currency
None of these
Appreciation of domestic currency encourages
Imports
Exports
Foreign Trade
All of these
Managed floating exchange rate is a system in which the:
The Government allow the exchange rate to determine by market forces
The central bank allows the exchange rate to determine by market forces
The central bank or Government allow the exchange rate to determine by market forces
None of the above
The foreign exchange rate is determined by………
Demand for foreign exchange
Supply of foreign exchange
Both A and B
None of these
Under managed floating exchange rate system, if rupee is getting depreciated fast then RBI:
Sell dollars in the foreign exchange market
Purchase dollars in the foreign exchange market
Print more currency notes
None of these
In pegging, the exchange rate is the price of a currency expressed in terms of:
Gold
Silver
Other currencies
None of these
The price of one currency in terms of another currency is called:
Foreign exchange rate
Flexible exchange rate
Current rate of exchange
None of the above
Dirty floating is related to:
fixed system of exchange rate
flexible system of exchange rate
both of these
none of these
If ₹ 75 is required to buy 1 US$, Instead of 65, it will lead to rising in:
Imports from the USA
Exports to USA
Both A and B
None of these
The downward-sloping demand curve for the foreign exchange reflects:
Direct relationship
Exponential relationship
Inverse relationship
Indirect relationship
Consider the following statements
1. Devaluation of the currency may promote exports.
2. Prices of a country’s products in the international market may fall due to devaluation.
Which of the statements given above is/ are correct?
Only 1
Only 2
Both 1 and 2
Neither 1 nor 2
Which function of the foreign exchange market protects against the foreign exchange risk?
Credit function
Hedging function
Transfer function
All of them
Which one is a source of the demand for foreign exchange?
Imports of Goods and Services from Abroad
Investment in Foreign Nations
Gift Scheme to Foreign Nations
All the above
Due to a fall in the value of Indian currency in the international market, the RBI decides to buy back Indian currency. This is a case of :
Flexible Exchange Rate
Fixed Exchange Rate
Managed Floating
Manipulated Floating
