Question 1

Depreciation of domestic currency leads to rise in:

Accepted Answer

A) Exports 
B) Imports 
C) Both (a) and (b) 
D) Neither (a) nor (b)

Question 2

Devaluation which means fall in value of domestic currency in terms of foreign currency takes place in

Accepted Answer

A) Flexible Exchange Rate regime 
B) Fixed Exchange Rate regime 
C) Both (a) and (b) 
D) Neither

Question 3

The supply of foreign exchange comes from..

Accepted Answer

A) the foreigners purchasing home country's goods and services through exports 
B) the foreigners who invest in home country through joint ventures or through financial market operations 
C) currency dealers and speculators. 
D) all of them

Question 4

Other things remaining unchanged, when in a country the price of foreign currency rises, national income is

Accepted Answer

A) Likely to rise 
B) Likely to fall 
C) both 
D) Not affected

Question 5

Indirect quotation is also known as

Accepted Answer

A) home currency quotation 
B) foreign currency quotation 
C) European quotation 
D) American quotation

Exam 6: Foreign Exchange and Exchange Rates

Depreciation of domestic currency leads to rise in:

Devaluation which means fall in value of domestic currency in terms of foreign currency takes place in

The supply of foreign exchange comes from..

Other things remaining unchanged, when in a country the price of foreign currency rises, national income is

Indirect quotation is also known as