Foreign Exchange Rate

Economics ⇒ International Trade and Globalisation

Foreign Exchange Rate starts at 11 and continues till grade 12. QuestionsToday has an evolving set of questions to continuously challenge students so that their knowledge grows in Foreign Exchange Rate. How you perform is determined by your score and the time you take. When you play a quiz, your answers are evaluated in concept instead of actual words and definitions used.

See sample questions for grade 11

A country has a fixed exchange rate system. Who is responsible for maintaining the exchange rate at the fixed level?

Define 'spot exchange rate'.

Describe the role of central banks in the foreign exchange market.

Explain how interest rate differentials between two countries can affect their exchange rates.

Explain the concept of 'currency convertibility'.

Explain the difference between appreciation and depreciation of a currency.

Explain the effect of political instability on a country's exchange rate.

Explain the impact of currency appreciation on imports.

Explain the term 'managed floating exchange rate system'.

If the demand for Indian goods increases in the international market, what is likely to happen to the value of the rupee?

If the demand for US dollars increases in India, what will happen to the value of the rupee against the dollar?

If the exchange rate changes from Rs. 70 per US dollar to Rs. 65 per US dollar, has the rupee appreciated or depreciated?

If the exchange rate of the Indian rupee moves from Rs. 65 per US dollar to Rs. 70 per US dollar, calculate the percentage depreciation of the rupee.

If the supply of foreign currency increases in the market, what will happen to its exchange rate?

Suppose the spot rate for 1 USD is Rs. 74 and the forward rate for 1 USD after 3 months is Rs. 76. Is the rupee expected to appreciate or depreciate?

What is meant by 'exchange control'?

What is meant by 'exchange rate regime'?

What is meant by the term 'foreign exchange rate'?

What is the main objective of the International Monetary Fund (IMF) with respect to exchange rates?