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प्रश्न
If you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.
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उत्तर
If I were to decide whether to buy domestic goods or foreign goods, then real exchange rate would be more relevant, because real exchange rate takes the inflation differential among the countries into account and is also used as an indicator of a country’s competitiveness in the foreign trade.
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संबंधित प्रश्न
Point out a demerit of the fixed exchange rate.
In a system of flexible exchange rates, the exchange rate is determined by the forces of ______
Under the Flexible Exchange Rate System, the exchange rate is determined by which factor?
Under the Fixed Exchange Rate System, the exchange rate is determined by whom?
Which statement describes Government Intervention under a Flexible Exchange Rate System?
How does RBI maintain a fixed rate in a Fixed Exchange Rate System?
If demand for foreign currency increases, what happens to the exchange rate?
If demand for foreign currency increases, what happens to the domestic currency and foreign currency?
Which factor states that expectation of appreciation of a foreign currency increases its demand?
Higher domestic interest rates attract foreign investment and increase demand for which currency?
Which formula represents Interest Rate Differential?
Higher national income increases imports and produces which result?
Which formula represents Exchange Rate (PPP)?
What is Revaluation under a Fixed Exchange Rate System?
If the fixed rate is below equilibrium, what does RBI do?
Under the Bretton Woods System, countries fixed their currencies against which currency?
