Question : The exchange rate is the price of one __________in terms of another___________.
Option 1: currency, currency
Option 2: import, export
Option 3: goods, services
Option 4: investment, remittance
Correct Answer: currency, currency
Solution : The correct answer is (a) currency, currency
The exchange rate is the price at which one currency can be exchanged for another currency. It represents the value of one currency in terms of another currency. For example, if the exchange rate between the US dollar and the euro is 1.10 , it means that 1 US dollar can be exchanged for 1.10 euros. The exchange rate is determined by various factors such as supply and demand in the foreign exchange market, interest rates, inflation rates, and market expectations. It plays a crucial role in international trade and financial transactions.
Question : Which of the following is not a type of current account transaction?
Option 1: Import of goods
Option 2: Import of services
Option 3: Export of goods
Option 4: Export of capital
Question : The ____ exchange rate is the price of one unit of foreign currency in terms of domestic currency.
Option 1: artificial
Option 2: nominal
Option 3: fixed
Option 4: real
Question : Which of the following is not a current account transaction?
Option 1: Import of goods and services
Option 2: Export of goods and services
Option 3: Transfer payments
Option 4: Foreign direct investment
Question : ___________ is the process of transferring funds from one country to another.
Option 1: Foreign exchange
Option 2: Remittance
Option 3: Import-export
Option 4: International trade
Question : Which of the following is an example of a unilateral transfer in the Balance of Payments?
Option 1: Export of goods
Option 3: Remittances from overseas workers
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