CUET Economics 2025 21 May Shift 1 PYQs

The balance of payments records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period. Identify the main accounts in the balance of payments.

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:

The Indian government imports 22 Rafael planes from France. In which sub-account and on which side of the Balance of Payments account this transaction will be recorded?