Question : What is the shape of Supply curve of foreign exchange:
Option 1: parallel to y-axis
Option 2: parallel to x-axis
Option 3: slope downwards
Option 4: slope upwards
Correct Answer: slope upwards
Solution : The correct answer is (d) slope upwards.
The supply curve of foreign exchange has an upward slope, indicating that as the exchange rate increases, the quantity of foreign exchange supplied also increases. This reflects the positive relationship between the exchange rate and the quantity of foreign exchange supplied by individuals, businesses, and institutions in the foreign exchange market.
Question : The slope of investment curve is ____.
Option 1: Downwards
Option 2: Upwards
Option 3: Parallel to X axis
Option 4: Parallel to Y axis.
Question : The slope of consumption curve is ____.
Question : In general, the demand curve slopes:
Option 1: Parallel to Y-axis
Option 2: Upward from left to right
Option 3: Parallel to X-axis
Option 4: Downward from left to right
Question : A ________ exchange rate is determined by the forces of supply and demand in the foreign exchange market.
Option 1: fixed
Option 2: floating
Option 3: managed
Option 4: pegged
Question : How can RBI help in bringing down the foreign exchange rate which is very high?
Option 1: Buying foreign exchange from market
Option 2: Selling foreign exchange from its reserves
Option 3: Increasing money supply in the economy
Option 4: None
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