12th Class Economics Foreign Exchange Rate Question Bank

done Assertion and Reason - Foreign Exchange Rate Total Questions - 5

• question_answer1)

  Assertion [A] Demand for foreign exchange and exchange rate moves in the same direction.

  Reason [R] When exchange rate rises domestic goods becomes cheaper in international market.

  A)
  Assertion [A] is true and Reason [R] is a correct reason of Assertion [A]. done clear
  B)
  Assertion [A] is true and Reason [R] is not a correct reason of Assertion [A] done clear
  C)
  Assertion [A] is false, but Reason [R] is true done clear
  D)
  Both are false done clear
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• question_answer2)

  Assertion [A] Make in India campaign initiated by the government leads to rise in foreign exchange rate.

  Reason [R] Inflow of foreign exchange improves the trade deficit of the country.

  A)
  Assertion [A] is true and Reason [R] is a correct reason of Assertion [A]. done clear
  B)
  Assertion [A] is true and Reason [R] is not a correct reason of Assertion [A]. done clear
  C)
  Assertion [A] is false, but Reason [R] is true done clear
  D)
  Both are false done clear
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• question_answer3)

  Assertion [A] Fixed exchange rate system is more stable as compared to floating exchange rate.

  Reason [R] Free play of demand and supply of foreign exchange brings ambiguity in the system.

  A)
  Assertion [A] is true and Reason [R] is a correct reason of Assertion [A]. done clear
  B)
  Assertion [A] is true and Reason [R] is not a correct reason of Assertion [A]. done clear
  C)
  Assertion [A] is false, but Reason [R] is true done clear
  D)
  Both are false done clear
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• question_answer4)

  Assertion [A] Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.

  Reason [R] Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.

  A)
  Assertion [A] is true and Reason [R] is a correct reason of Assertion [A] done clear
  B)
  Assertion [A] is true and Reason [R] is not a correct reason of Assertion [A] done clear
  C)
  Assertion [A] is false, but Reason [R] is true done clear
  D)
  Both are false done clear
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• question_answer5)

  Assertion [A] Forward market refers to a market in which transactions are settled on a future date at a rate agreed upon today.

  Reason [R] Such transactions are entered into to gain by the changes in foreign exchange rate.

  A)
  Both Assertion [A] and Reason [R] are correct and Reason [R] is the correct explanation of Assertion [A] done clear
  B)
  Both Assertion [A] and Reason [R] are correct, but Reason [R] is not the correct explanation of Assertion [A] done clear
  C)
  Assertion [A] is correct, but Reason [R] is incorrect done clear
  D)
  Both Assertion [A] and Reason [R] are correct done clear
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