Macro

Balance of Payments

Easy

Arrange the following in the correct order with respect to the change in import demand and its impact on exchange rate:

A. National income increases.

B. Domestic currency depreciates.

C. Spending on imported goods is likely to increase.

D. The demand curve for foreign exchange shifts to the right.

Choose the correct answer from the options given below:

C, B, A, D

A, B, C, D

A, C, D, B

C, B, D, A

✅ Correct Option: 3

A rise in national income (A) increases spending on imported goods (C). Higher import spending raises the demand for foreign exchange, shifting its demand curve to the right (D). With supply unchanged, the price of foreign exchange rises, i.e., the domestic currency depreciates (B). Order: A, C, D, B.

2023: 20 June Shift 1

Exchange Rate is the price of a currency expressed in terms of.

2022: 19 July Shift 2

Identify the most unlikely reason or appreciation of the US dollar.

2024: 16 May

Match List-I with List-II :

2025: 3 June Shift 2

When a country exports more goods than its imports, the balance of trade is considered to be?

2025: 28 May Shift 1

With reference to the above passage, the current account comprises?

Exports and Imports of visible items only.
Exports and imports of visible and invisible items and external borrowings.
Exports and imports of goods & services plus transfer payments.
Short Term Debt.

2023: 28 May Shift 2

Current Account components of trade in services include :

(A) Gifts, Remittances

(B) Net Non-Factor Income

(D) Grants

Choose the correct answer from the options given below :

Solution

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