Advertisements
Advertisements
Question
How can increase in foreign direct investment affect the price of foreign exchange?
Solution
When there is an increase in foreign direct investment, the supply of foreign currency increases, and thus, the price of foreign exchange falls.
APPEARS IN
RELATED QUESTIONS
(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.
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
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?
What is 'devaluation'?
How is the exchange rate determined under a flexible exchange rate regime?
Discuss briefly the concept of managed floating system of foreign exchange rate determination.
What is the relationship between supply of foreign exchange and exchange rate?
Other things remaining unchanged, when in a country the price of foreign currency rises, national income is ______.
______ rate is the price of one currency in terms of another.
______ rate is the ratio of foreign prices to domestic prices.
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 cotton garments by India to the USA
