Foreign exchange is demanded by _______.

1. domestic residents to purchase goods and services from other countries.
2. sending gifts and grants to foreign countries (abroad).
3. the domestic residents to purchase financial assets in a particular country.
4. all of them.

Which exchange rate measures the average relative strength of a given currency with respect to other currencies without eliminating the effect of change in price?

1. Nominal exchange rate.
2. Nominal effective exchange rate.
3. Real exchange rate.
4. Real effective exchange rate.

Which exchange rate is officially declared by the government?

1. Managed Floating Rate.
2. Floating Exchange Rate.
3. Fixed Exchange Rate.
4. None.

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

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

Increase in the value of domestic currency by the government is called _______.

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

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

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

Which is not a feature of Balance of Payments (BOP) Account?

1. It includes economic transactions.
2. It has given period of time.
3. It records only capital transactions.
4. Trade between resident of a country and rest of the world.

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.

Name the economic transactions which are undertaken to make equilibrium in balance of payment,

1. Autonomous items.
2. Accommodating items.
3. Invisible items.
4. None of them.

Balance of Payments ‘deficit’ is the excess of:

1. Current account payments over current account receipts.
2. Capital account payments over capital account receipts.
3. Autonomous payments over autonomous receipts.
4. Accommodating payments over a accommodating receipts.