Foreign Exchange Rate
Economics ⇒ International Trade and Globalisation
Foreign Exchange Rate starts at 11 and continues till grade 12.
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See sample questions for grade 12
Define 'exchange rate regime'.
Explain the difference between appreciation and depreciation of a currency.
Explain the difference between devaluation and depreciation of a currency.
Explain the impact of depreciation of the Indian rupee on imports.
Calculate the percentage depreciation of the rupee if the exchange rate changes from 1 USD = ₹60 to 1 USD = ₹75.
If the demand for Indian goods increases in the international market, what will be the effect on the value of the rupee?
If the exchange rate changes from 1 USD = ₹70 to 1 USD = ₹65, has the rupee appreciated or depreciated?
If the exchange rate changes from 1 USD = ₹70 to 1 USD = ₹80, what has happened to the value of the rupee?
If the Indian rupee appreciates against the US dollar, what will be the effect on Indian exports? (1) Exports will become cheaper, (2) Exports will become costlier, (3) No effect, (4) Exports will increase automatically.
If the supply of foreign currency increases, what will be the effect on its exchange rate? (1) It will increase, (2) It will decrease, (3) It will remain unchanged, (4) It will fluctuate randomly
Which of the following best describes a flexible exchange rate system? (1) The exchange rate is fixed by the government, (2) The exchange rate is determined by the forces of demand and supply in the foreign exchange market, (3) The exchange rate is determined by international agreements, (4) The exchange rate is set by the central bank.
Which of the following factors can cause appreciation of a currency? (1) Increase in imports, (2) Increase in exports, (3) Increase in demand for foreign currency, (4) Increase in supply of domestic currency
Fill in the blank: The ________ is responsible for managing the foreign exchange reserves in India.
Fill in the blank: The ________ is the price of one currency in terms of another currency.
Fill in the blank: The ________ market is where currencies are bought and sold.
Fill in the blank: The system in which the value of a currency is determined by the government or central bank is called the ________ exchange rate system.
State whether the following statement is true or false: Devaluation can only occur under a flexible exchange rate system.
State whether the following statement is true or false: Devaluation is a deliberate downward adjustment of the value of a country's currency under a fixed exchange rate system.
State whether the following statement is true or false: Exchange rate fluctuations can affect the balance of payments of a country.
State whether the following statement is true or false: The foreign exchange market is a global decentralized market for trading currencies.
