Define induced investment
Induced investment: It is a type of investment that is of profit motive in nature.
The U.S. economy is an instance of a system characterized by: (1) Mixture of different aspects of various economic systems. (2) Strictly decentralized the decision making process. (3) Centralized ownership of resources. (4) Political decisions regarding all allocative
Describe the two sources of supply of foreign exchange: The two sources of supply of foreign exchange are: Exports and foreign tourism.
Foreign exchange rate: The Foreign exchange rate is a price of foreign currency in terms of domestic currency.
Determine the factors accountable for inflow of foreign currency? Answer: a) Foreigners buying home country services and goods via exports. b) Foreigners investment in home country via joint ventures and via
suppose that an investor has an extra cash reserve of $1000000 to invest for one year. annually rate is 10%
If exchange rate of foreign currency downs or falls, its demand rises. Describe how? Answer: If exchange rate falls, an import become cheaper, demand for imports in
Supply of foreign exchange: (A) By exports of services and goods(B) Direct foreign investment in residence country(C) For approximate purchases by non-residents in the home country(D) Remittances
Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.
China is a huge manufacturer of technology of telephone devices. It has lately become a member of W.T.O. that means it can sell its products in other member countries such as India. Assume that it does export a big number of telephone instruments to India:
State the items that are not involved in the current account of India’s Balance of payment. Answer: The capital transactions is in the form of direct and portf
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