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प्रश्न
How can increase in foreign direct investment affect the price of foreign exchange?
उत्तर
When there is an increase in foreign direct investment, the supply of foreign currency increases, and thus, the price of foreign exchange falls.
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संबंधित प्रश्न
(a) In which sub-account and on which side of balance of payments account will foreign investments in India be recorded? Given reasons.
(b)What will be the effect of foreign investments in India on exchange rate? Explain.
Explain the effect of appreciation of domestic currency on imports.
Other things remaining the same, when in a country the market price of the foreign currency falls, national income is likely (Choose the correct alternative)
a. to rise
b. to fall
c. to rise or to fall
d. to remain unaffected
Other things remaining the same, when the foreign currency becomes cheaper, the effect on national income is likely to be : (Choose the correct alternative)
a. Positive
b. Negative
c. Positive and negative both
d. No effect
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