Question : Which of the following steps should taken by the central bank if there is excessive rise in the foreign exchange rate?

Option 1: Supply foreign exchange from its stock
 

Option 2: Demand more of other foreign exchange
 

Option 3: Not intervene in the market as exchange rate is determined by the market forces

Option 4: Help central government to stabilize foreign exchange rate

Question : It is determined by forces of demand and supply.
 

Option 1: Foreign exchange
 

Option 2: Foreign exchange market
 

Option 3: Foreign exchange rate
 

Option 4: None of the above.
 

Question : In a floating exchange rate system, exchange rates are determined by:

Option 1: Market forces of supply and demand
 

Option 2: Government intervention
    

Option 3: Central bank policies

Option 4: Fixed exchange rates

Question : Selling of securities by foreign institutional investors in Indian capital market with lead to fall in the _______ of foreign currency in the market. The situation might lead to excess _____ of foreign currency at prevailing foreign exchange rate.
 

Option 1: Demand, demand
 

Option 2: Supply, supply 
 

Option 3: Demand, supply 
 

Option 4: Supply, demand
 

Question : In a floating exchange rate system, the exchange rate is determined by market forces, and fluctuations in the rate are caused by changes in ________.

Option 1: government policies
 

Option 2: inflation rates
 

Option 3: interest rates

Option 4: supply and demand