NextQ51

(i) Explain the effect of appreciation of domestic currency on imports of a nation. Provide an example to support your explanation. (ii) Explain any two components of Current Account under Balance of Payments. (i) ``A rise in price of foreign exchange leads to fall in demand for foreign exchange, other factors remaining constant.'' Do you agree with the given statement ? Give valid reasons in support of your answer. (ii) As per the statement given by the Governor of Reserve Bank of India (RBI) dated 10th August 2023 : ``The inflows from net commercial borrowings have been US $ 60 billion during April - June 2023.'' Identify, the sub-account and the side of Balance of Payments where the above stated transactions would be recorded. State valid reasons in support of your answer.

Introduction to Balance of PaymentsStudy Simplify SpecialPYQ4SQ
Question 50

(i) Distinguish between Balance of Payments and Balance of Trade. (ii) Define Current Account Surplus. (i) Using suitable example, distinguish between Foreign Direct Investments (FDI) and Foreign Institutional Investments (FII). (ii) State one example of External Assistance as a component of capital account.

50/69