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  3. 12th Class
  4. Economics
  5. Foreign Exchange Rate

12th Class Economics Foreign Exchange Rate Question Bank Case Based MCQs - Foreign Exchange Rate

  • question_answer
    To avoid appreciation of currency, RBI should opt for

    A) Supply of foreign exchange from its reserve

    B) Purchase of foreign exchange from market

    C) Devaluation of domestic currency

    D) Revaluation of domestic currency

    Correct Answer: B

    Solution :

    Fall in price of foreign exchange leads to appreciation of domestic currency due to low demand. In this situation, Central bank should demand more foreign exchange to bring the exchange rate to a normal state.


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