Question : Statement1: Devaluation refers to reduction in price of domestic currency in terms of all foreign currencies under fixed exchange rate regime.

Statement 2: Devaluation of the domestic currency makes import cheaper.

Option 1: Both the statements are true.
 

Option 2: Both the statements are false.
 

Option 3: Statement 1 is true and Statement 2 is false

Option 4: Statement 2 is true and Statement 1 is false

Question : Which of the following statement is correct?

• Devaluation and depreciation of currency are one and the same thing
• Demand for American goods will rise in India due to every session of Indian currency.

Option 1: Both are true 
 

Option 2: Both are false 
 

Option 3: Statement 1 is true and statement 2 is false.
 

Option 4: Statement 2 is true and statement 1 is false.
 

Question : Statement 1: Inferior goods have a negative income elasticity of demand.

Statement 2: When consumer income increases, the demand for inferior goods decreases.

Option 1: Both statements are true.

Option 2: Both statements are false.

Option 3: Statement 1 is true, and statement 2 is false

Option 4: Statement 1 is false, and statement 2 is true.

Question : Which of the following statement is correct?

• Depreciation of currency has same effect on exports as devaluation of currency.
• Increase in investment by MNCs in India leads to depreciation of domestic currency.

Option 1: Both are true 
 

Option 2: Both are false 
 

Option 3: Statement 1 is true and statement 2 is false.
 

Option 4: Statement 2 is true and statement 1 is false.
 

Question : Which of the following statement is correct?

• Demand deposit is a optional money.
• Demand deposits are treated as equal to currency held as they are readily accepted as a means of payment.
   

Option 1: Both are true 
 

Option 2: Both are false 
 

Option 3: Statement 1 is true and statement 2 is false.
 

Option 4: Statement 2 is true and statement 1 is false.