Commerce Exam > Commerce Notes > Economics Class 12 > Worksheet: Open Economy Macroeconomics - 2
Worksheet: Open Economy Macroeconomics - 2 | Economics Class 12 - Commerce PDF Download
Q1: What is Balance of Payments?
Q2: Define the term Balance of Trade.
Q3: Differentiate between BOP & BOT.
Q4: State the Items included in BOP account.
Q5: Explain the Structure of BOP: BOP account is categorized into Current Account & Capital Account.
Q6: Differentiate between BOP on current account & capital account.
Q7: Briefly explain the other items in the BOP.
Q8: Differentiate between Autonomous & Accommodating Items.
Q9: What is meant by Disequilibrium in the BOP?
Q10: State the causes for disequilibrium in BOP.
Q11: State the measures to correct adverse BOP:
Q12: Explain the determination of foreign Exchange Rate.
Q13: State the sources of demand for foreign exchange.
Q14: Differentiate between Depreciation and Devaluation.
Q15: How do we finance the deficit on current account BOP in case officially reserves with the RBI are not moved?
Q16: What is depreciation of rupee? What is its likely impact on Indian imports and how?
Q17: How does decrease in FDI in India act as a supply stock for foreign exchange?
Q18: How do the deficit BoP and surplus BoP impact the exchange rate?
Q19: Define the term Foreign Exchange Rate.
Q20: Define the term Foreign Exchange Market.
Q21: How is depreciation of Indian rupee likely to affect Indian export? Explain.
Q22: Will you always appreciate a rise in exchange rate as a means to boost our exports?
Q23: What are the Sources of Supply of foreign exchange?
Q24: Explain the role of Central Bank during depreciation.
Q25: Calculate the value of imports when the balance of trade is (-) Rs 800 crore and the value of exports is Rs. 500 crore.
The document Worksheet: Open Economy Macroeconomics - 2 | Economics Class 12 - Commerce is a part of the Commerce Course Economics Class 12.
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FAQs on Worksheet: Open Economy Macroeconomics - 2 - Economics Class 12 - Commerce
| 1. What is open economy macroeconomics? |  |
Ans. Open economy macroeconomics is a branch of economics that studies the interaction between domestic and foreign economies. It focuses on analyzing the effects of international trade, capital flows, and exchange rate fluctuations on a country's economic performance.
| 2. How does international trade impact an open economy? | |
Ans. International trade affects an open economy in several ways. It allows countries to specialize in producing goods or services in which they have a comparative advantage, leading to increased efficiency and overall economic growth. It also provides consumers with a wider variety of goods at lower prices and can create employment opportunities.
| 3. What are capital flows and why are they important in open economy macroeconomics? | |
Ans. Capital flows refer to the movement of financial assets, such as investments, loans, and portfolio flows, between countries. These flows play a crucial role in open economy macroeconomics as they influence exchange rates, interest rates, and investment levels. Capital flows can affect a country's economic stability and growth by impacting its currency value and financing capabilities.
| 4. How does exchange rate fluctuations impact an open economy? | |
Ans. Exchange rate fluctuations have significant implications for an open economy. A depreciation in the domestic currency can make exports more competitive and boost economic activity, while an appreciation can make imports cheaper and reduce inflationary pressures. Exchange rate movements also affect the profitability of international investments and can influence capital flows.
| 5. What are the main policy tools used in open economy macroeconomics? | |
Ans. The main policy tools used in open economy macroeconomics include fiscal policy, monetary policy, and exchange rate policy. Fiscal policy involves government spending and taxation measures to influence aggregate demand and economic activity. Monetary policy involves the management of interest rates and money supply to control inflation and stimulate or cool down the economy. Exchange rate policy involves interventions by central banks to influence the value of the domestic currency in relation to other currencies.
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Nov 03, 2024 Last updated |
Document Description: Worksheet: Open Economy Macroeconomics - 2 for Commerce 2024 is part of Economics Class 12 preparation.
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