Macro

Balance of Payments

Medium

The issue of currency's credibility and ensuring stability in international transactions, is handled by ............

International Monetary System.

International Monetary Fund.

Central Bank.

World Bank.

✅ Correct Option: 1

Option 1 -> The International Monetary System is the framework governing exchange rates and international payments.

Option 2 -> IMF is an institution within the international monetary system, not the system itself.

Option 3 -> Central Banks manage national currencies, not the overall international monetary framework.

Option 4 -> World Bank focuses on development financing, not currency stability.

Hence, International Monetary System -> The International Monetary System is the comprehensive framework that encompasses rules, institutions, mechanisms, and procedures regulating international financial transactions. It addresses currency credibility through exchange rate mechanisms, international liquidity, and balance of payments adjustments. This system includes institutions like the IMF, but represents the broader structure that ensures stability and confidence in cross-border monetary exchanges. -> correct

2025: 26 May Shift 2

A country whose aggregate demand grows faster than the rest of the world's normally finds its currency______.

2025: 16 May Shift 1

Balance of payments of an economy is in surplus when__________

2025: 15 May Shift 1

"GST has improved India's ranking in terms of ease of doing business. The introduction of GST has attracted foreign investors in large numbers."

What will be the sequential impact of the above on the exchange rate of the rupee in the international money market?

(A) The supply curve of foreign exchange shifts to the right.

(B) The exchange rate starts falling.

(D) An increase in foreign investment increases the supply of foreign exchange.

Choose the correct answer from the options given below:

2026: 13 May Shift 2

Suppose the Indian government wants to encourage exports and fix a higher exchange rate, say Rs 100 per dollar from the current exchange rate of Rs 80 per dollar. This government action in the exchange rate system is called as?

2026: 6 June Shift 1

In a fixed exchange rate system, the government's action that increases the exchange rate of foreign currency is called?

2023: 28 May Shift 2

If Trade Deficit is Rs 2000 crores and imports is worth Rs 4000 crore, then the value of exports will be :

The issue of currency's credibility and ensuring stability in international transactions, is handled by ............

Solution

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