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Explain the Impact of Rise in Exchange Rate on National Income. - Economics

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प्रश्न

Explain the impact of rise in exchange rate on national income.

उत्तर

Impact of rise in exchange rate on National income

Foreign exchange rate refers to the rate at which one currency is exchanged for the other. If the exchange rate rises from $1 = Rs 45 to $1 = Rs 60, the Indian rupee is said to be depreciated. It implies that there is fall in the value of domestic currency against foreign currency. Depreciation implies that domestic goods become cheaper in terms of foreign currency and hence the demand for exports increases.

As export increases, there will be increase in employment growth, aggregate demand which causes higher economic growth. This results in bigger share of national income.

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2017-2018 (March) All India Set 3

संबंधित प्रश्न

C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate

(i) Equilibrium level of National Income.

(ii) Consumption expenditure at equilibrium level of national income.


Unforseen obsolescence of fixed capital assets during production is: (Choose the correct alternative)

a. Consumption of fixed capital

b. Capital loss

c. Income loss

d. None of the above


How should the following be treated in estimating the national income of a country? You must give the reason for your answer

Expenditure on providing police services by the government


How should the following be treated while estimating national income? You must give the reason in support of your answer.

Bonus paid to employees


Investment made by the government is _____________ investment.(unplanned/gross/autonomous/induced)


Give reasons or explain the following statement:

The concept of national income has an important place in economic development. 


State whether the following statements are True or False with reason: 

Ten years period is considered for measuring National Income.


Answer the following question:

What is double counting of national income?


State with reason whether you agree or disagree with the following statement:

Many precautions are to be taken while estimating national income by income method.


State with reason whether you agree or disagree with the following statement:

Gross National product and Gross Domestic product are same concepts.


Distinguish between:
Net national product and Net domestic product.


Distinguish between:

Output method of measuring national income and Income method of measuring national income.


Fill in the blank with appropriate alternatives given below

National income is the subject matter of _________ Economics. 


Study the following table, figure, passage and answer the question given below it.

Components of GNP
for the year 2018
In crores
Consumption 200
Investment 300
Govt.Expenditure 400
Net export - 100
Net receipts  - 50
Depreciation 100

A. Complete the formula

GNP = C + `square` + G + (X - M) + `square` (1m)

B. Calculate Gross National Product & Net National Product from the above data. (3m)


  1. Explain the concept of product (real flow) with the help of above diagram. (2m) 
  2. Explain the concept of Money flow with the help of above diagram. (2m)

Write the formula for calculating GNP.


Nominal GNP is same as ____________.


NNPMP =?


How should the following be treated in estimating National Income of a Country? Give valid reasons.

Expenditure on upgradation of fixed asset by a firm.


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