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Question
Answer the following question.
State any two factors responsible for the inflow of foreign currency.
Solution
Factors which are responsible for inflow of foreign currency are:
- A country receives foreign exchange from various receipts in economic transactions such as a receipt from exports of the domestic country to rest of the world, receipt of remittances from abroad, FDI, and purchase of financial assets in the domestic country.
- The foreign exchange flows in the country due to speculative activities.
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