Question : Fill in the blanks- _________ are the external assets held by the central bank for direct financing of external payment imbalance.
Option 1: Foreign exchange reserves
Option 2: Gold reserves
Option 3: Special drawing rights
Option 4: None of the above.
Correct Answer: Foreign exchange reserves
Solution : Foreign exchange reserves are the external assets held by the central bank for direct financing of external payment imbalance. Hence Option A is correct.
Question : It refers to purchase of an asset, such that it gives direct control to the purchaser over the asset.
Option 1: Foreign direct investment
Option 2: Foreign portfolio investment
Option 3: Change in foreign exchange reserves
Option 4: None of the above
Question : It refers to purchase of an asset, such that it doesn’t gives direct control to the purchaser over the asset.
Question : It refers to the rate at which currency is exchanged for others.
Option 1: Foreign exchange
Option 2: Foreign exchange market
Option 3: Foreign exchange rate
Question : It is determined by forces of demand and supply.
Question : It refers to a system in which foreign exchange rate is determined by market forces in central bank influence the exchange rate.
Option 1: Fixed exchange rate system
Option 2: Flexible exchange rate system
Option 3: Managed floating rate system
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