Reduction in the value of domestic currency through market forces is called ________.

1. depreciation.
2. devaluation.
3. revaluation.
4. appreciation.

Buyers and sellers of foreign exchange are _______.

1. central banks.
2. commercial banks.
3. brokers.
4. all of them.

Current transactions are of _______ nature.

1. flow.
2. stock.
3. both flow and stock.
4. none of the above.

Increase in the value of domestic currency through market forces is called _______.

1. depreciation.
2. devaluation.
3. revaluation.
4. appreciation.

Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely: (Choose the correct alternative)

1. To rise.
2. To fall.
3. To rise or to fall.
4. To remain unaffected.

Reduction in the value of domestic currency by the government is called ______.

1. depreciation.
2. revaluation.
3. devaluation.
4. appreciation.

When one country manipulates exchange rate against the interest of other country, is known as ________.

1. managed floating.
2. dirty floating.
3. wide band.
4. crawling peg.

Which function of foreign exchange market protects against the foreign exchange risk?

1. Credit function.
2. Hedging function.
3. Transfer function.
4. All of them.

Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called: (Choose the correct alternative)

1. Current transactions.
2. Capital transactions.
3. Autonomous transactions.
4. Accommodating transactions.

Unfavorable disequilibrium in BoP occurs when there is:

1. Balance of trade deficit.
2. Total exports are more than total imports.
3. Total imports are more than total exports.
4. Exports of goods and services are less than imports of goods and services.