CUET Economics 2025 26 May Shift 2 PYQs

"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.

(C) There is an appreciation of the rupee on the international money market.

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

Choose the correct answer from the options given below:

Foreign exchange reserves are ample, means?

1. Reserve is sufficient to purchase goods and services from abroad.
2. Anticipated demand for foreign goods and services can be met through incumbent foreign exchange reserve.
3. Supply of foreign reserves is more than demand of foreign reserves.
4. Government is confident about present and future need of foreign reserve.

In deficit condition of Balance of Payment if the central bank sells foreign exchange then this particular transaction is known as .......