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प्रश्न
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
उत्तर
Negative
Currency appreciation takes place when there is a decrease in the price of a foreign currency in terms of the domestic currency. Here, less rupees are required to buy one dollar, i.e. the value of domestic currency becomes more valuable in relation to a foreign currency. So, the quantum of imports will increase and the exports will decrease, and thereby it leads to a decrease in national income.
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संबंधित प्रश्न
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When price of a foreign currency rises, its supply also rises. Explain why.
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______ rate is the price of one currency in terms of another.
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Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?
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State whether the following items will be included in the estimation of National Income or not: Give a reason for your answer.
Profit earned by State Bank of India in a foreign country.
