CUET Economics 2025 13 May Shift 2 PYQs

Choose the correct statements from the following in respect of exchange rate system.

(A) Floating Exchange Rate exchange rate is determined by the market forces of demand and supply.

(B) In a fixed exchange rate system, making domestic currency cheaper is called Devaluation.

(C) Increase in exchange rate implies that the price of foreign currency has increased and is called depreciation.

(D) Exchange rates between any two currencies adjust to reflect differences in the price levels in the two countries.

Choose the correct answer from the options given below:

What does capital account of BOP record?

International economic transactions are called ....... when transactions are made due to some reason other than to bridge the gap in the balance of payments, that is when they are independent of the state of balance of payments.