12th Class Economics Foreign Exchange Rate Question Bank

done Case-Based - Foreign Exchange Rate Total Questions - 4

• question_answer1)

  Economists say that rise in foreign exchange reserves in combination with benign oil prices and tepid imports leading to a current account surplus has helped the Indian rupee to remain broadly stable since mid-March 2020 despite deterioration in some of the other macro parameters such as retail inflation fiscal deficits and negative GDP growth.

  Experts say that in times of dwindling economic activity and growth the rising forex reserves provide a lot of strength as they now cover one-year of import expenditure.

  It is important to note that gold which was a big import component for India witnessed a sharp decline in the quarter ended June 2020 following the skyrocketing prices and the lockdown induced by the pandemic. As per World Gold Council gold imports fell by 95 per cent to 11.6 tonnes in the quarter compared to 247.4 tonnes in the year- ago period due to logistical issues and poor demand.

  Source: Indian Express Oct 18 2020

  On the basis of above imaginary information answer the following questions:

  When export of goods and services are less than the imports of goods and services then there is a ............. in current account.

  A)
  deficit done clear
  B)
  fixe done clear
  C)
  sell done clear
  D)
  appreciation done clear
  View Solution play_arrow

• question_answer2)

  Economists say that rise in foreign exchange reserves in combination with benign oil prices and tepid imports, leading to a current account surplus, has helped the Indian rupee to remain broadly stable since mid-March 2020, despite deterioration in some of the other macro parameters such as retail inflation, fiscal deficits and negative GDP growth.

  Experts say that in times of dwindling economic activity and growth, the rising forex reserves provide a lot of strength as they now cover one-year of import expenditure.

  It is important to note that gold, which was a big import component for India, witnessed a sharp decline in the quarter ended June 2020 following the skyrocketing prices and the lockdown induced by the pandemic. As per World Gold Council, gold imports fell by 95 per cent to 11.6 tonnes in the quarter, compared to 247.4 tonnes in the year- ago period due to logistical issues and poor demand.

  Source: Indian Express, Oct 18, 2020

  On the basis of above imaginary information, answer the following questions:

  Foreign exchange rate determined on the basis of gold price is known as.................... exchange rate.

  A)
  deficit done clear
  B)
  fixed done clear
  C)
  sell done clear
  D)
  appreciation done clear
  View Solution play_arrow

• question_answer3)

  Economists say that rise in foreign exchange reserves in combination with benign oil prices and tepid imports, leading to a current account surplus, has helped the Indian rupee to remain broadly stable since mid-March 2020, despite deterioration in some of the other macro parameters such as retail inflation, fiscal deficits and negative GDP growth.

  Experts say that in times of dwindling economic activity and growth, the rising forex reserves provide a lot of strength as they now cover one-year of import expenditure.

  It is important to note that gold, which was a big import component for India, witnessed a sharp decline in the quarter ended June 2020 following the skyrocketing prices and the lockdown induced by the pandemic. As per World Gold Council, gold imports fell by 95 per cent to 11.6 tonnes in the quarter, compared to 247.4 tonnes in the year- ago period due to logistical issues and poor demand.

  Source: Indian Express, Oct 18, 2020

  On the basis of above imaginary information, answer the following questions:

  Rising foreign exchange reserves will help the Central bank to................... foreign exchange at the time of high foreign exchange rate.

  A)
  deficit done clear
  B)
  fixed done clear
  C)
  sell done clear
  D)
  appreciation done clear
  View Solution play_arrow

• question_answer4)

  Economists say that rise in foreign exchange reserves in combination with benign oil prices and tepid imports, leading to a current account surplus, has helped the Indian rupee to remain broadly stable since mid - March 2020, despite deterioration in some of the other macro parameters such as retail inflation, fiscal deficits and negative GDP growth.

  Experts say that in times of dwindling economic activity and growth, the rising forex reserves provide a lot of strength as they now cover one-year of import expenditure.

  It is important to note that gold, which was a big import component for India, witnessed a sharp decline in the quarter ended June 2020 following the skyrocketing prices and the lockdown induced by the pandemic. As per World Gold Council, gold imports fell by 95 per cent to 11.6 tonnes in the quarter, compared to 247.4 tonnes in the year- ago period due to logistical issues and poor demand.

  Source: Indian Express, Oct 18, 2020

  On the basis of above imaginary information, answer the following questions:

  Fall in demand and a rise in supply of foreign exchange would lead to..................... of currency.

  A)
  deficit done clear
  B)
  fixed done clear
  C)
  sell done clear
  D)
  appreciation done clear
  View Solution play_arrow