Define Managed floating rate system
Managed floating rate system: This is a system in which foreign exchange rate is found out by market forces and central bank is a key contributor to stabilize the currency in condition of tremendous appreciation or depreciation.
Describe the two sources of supply of foreign exchange: The two sources of supply of foreign exchange are: Exports and foreign tourism.
Which transactions find out the balance of trade? When the balance of trade is in surplus?
The simple circular flow model of a private economy describes how income and resources flow among: (1) Households and business associations. (2) Corporations and government agencies. (3) Sole corporations and proprietorship (4) Business associations a
Describe the meaning of deficit in BOP: Whenever autonomous foreign exchange payments surpass autonomous foreign exchange receipts, the difference is termed as balance of payments deficit.
Define foreign exchange: It is the currency other than domestic currency.
When Balance of payment of a country is Rs (-) 100 crores and total payment are Rs 500 crores. Determine its total receipts.
In simple circular flow model, the only entities which finally consume goods, own resources, pay taxes or bear the loads of inflation, experience joy, or suffer pain, are as: (i) corporations. (ii) Households. (iii) Government agencies. (iv) Business
Why foreign currency or exchange is required? Answer: a) To buy services and goods from other countries. b) To send a gift abroad. c) To buy financial assets in a specific country and d) To contem
State the two sources of demand of foreign exchange: Import of services and goods and to acquire education in abroad.
Autonomous or public investment: It is a type of investment that is not of profit motivated.
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