Advertisements
Advertisements
Question
Explain the effect of appreciation of domestic currency on imports.
Solution
The appreciation of domestic currency refers to an increase in the price of domestic currency related to foreign exchange. For example, $1 = Rs 50 to $1 = Rs 42 indicates that the goods from abroad will be cheaper, and hence, a rise in the demand for imports.
APPEARS IN
RELATED QUESTIONS
Foreign exchange transactions dependent on other foreign exchange transactions are called ______.
Recently Government of India has doubled the import duty on gold. What impact is it likely to have on foreign exchange rate and how?
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
Visits of foreign countries for sightseeing etc. by the people of India is on the rise. What will be its likely impact on foreign exchange rate and how?
When price of a foreign currency rises, its supply also rises. Explain why.
How is the exchange rate determined under a flexible exchange rate regime?
Answer the following question.
State any two factors responsible for the inflow of foreign currency.
Discuss briefly the concept of managed floating system of foreign exchange rate determination.
______ rate is the price of one currency in terms of another.
______ rate is the ratio of foreign prices to domestic prices.
Suppose it takes 1.25 yen to buy a rupee, and the price level in Japan is 3 and the price level in India is 1.2 Calculate the real exchange rate between India and Japan (the price of Japanese goods in terms of Indian goods).
Foreign Exchange Thansactions which are independent of other transactions in the Balance of Payments Account are called:
When domestic currency loses its value in relation to a foreign currency in the international money market, it is a situation of:
Foreign exchange refers to:
Why is the demand curve for foreign exchange negatively sloped?
Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?
Export of technical knowledge by the USA to India
Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?
Import of gold jewellery by the USA from India
