Test: Open Economy Macrcoeconomics- Case Based Type Question- 2 - Commerce MCQ
12 Questions MCQ Test - Test: Open Economy Macrcoeconomics- Case Based Type Question- 2
Read the news report given below and answer the question that follow with respect to the same:
NEW DELHI: India’s Foreign Direct Investment (FDI) saw a significant jump in November 2020. FDI data released by the Commerce Ministry shows that total FDI in the month of November 2020 grew by a whopping 81 % to $ 10.15 billion against $ 5.6 billion in November 2019. FDI equity has also jumped to $ 8.5 billion as against $ 2.8 billion in November 2019, registering a growth of 70 %.
India has attracted a total FDI inflow of $ 58.37 billion during April to November 2020. It is the highest ever for the first eight months of a financial year (F.Y.) and 22 % higher as compared to the first eight months of 2019-20 ($ 47.67 billion).
FDI equity inflow received during F.Y. 2020-21 (April to November 2020) is $ 43.85 billion. It is also the highest ever for the first eight months of a financial year and 37% more compared to the first eight months of 2019-20 ($ 32.11 billion), the data revealed.
FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavour of the government to put in place an enabling and investor-friendly FDI policy, the Commerce Ministry said.
The intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. The steps taken in this direction have borne fruit, as is evident from the ever-increasing volumes of FDI inflows being received into the country, it said.
Measures taken by the Government on the FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors.
Q. There has been an increase in the FDI. How has the government helped it?
Read the news report given below and answer the question that follow with respect to the same:
NEW DELHI: India’s Foreign Direct Investment (FDI) saw a significant jump in November 2020. FDI data released by the Commerce Ministry shows that total FDI in the month of November 2020 grew by a whopping 81 % to $ 10.15 billion against $ 5.6 billion in November 2019. FDI equity has also jumped to $ 8.5 billion as against $ 2.8 billion in November 2019, registering a growth of 70 %.
India has attracted a total FDI inflow of $ 58.37 billion during April to November 2020. It is the highest ever for the first eight months of a financial year (F.Y.) and 22 % higher as compared to the first eight months of 2019-20 ($ 47.67 billion).
FDI equity inflow received during F.Y. 2020-21 (April to November 2020) is $ 43.85 billion. It is also the highest ever for the first eight months of a financial year and 37% more compared to the first eight months of 2019-20 ($ 32.11 billion), the data revealed.
FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavour of the government to put in place an enabling and investor-friendly FDI policy, the Commerce Ministry said.
The intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. The steps taken in this direction have borne fruit, as is evident from the ever-increasing volumes of FDI inflows being received into the country, it said.
Measures taken by the Government on the FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors.
Q. What effect will the increase in foreign direct investment have on the economy?
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Read the news report given below and answer the question that follow with respect to the same:
NEW DELHI: India’s Foreign Direct Investment (FDI) saw a significant jump in November 2020. FDI data released by the Commerce Ministry shows that total FDI in the month of November 2020 grew by a whopping 81 % to $ 10.15 billion against $ 5.6 billion in November 2019. FDI equity has also jumped to $ 8.5 billion as against $ 2.8 billion in November 2019, registering a growth of 70 %.
India has attracted a total FDI inflow of $ 58.37 billion during April to November 2020. It is the highest ever for the first eight months of a financial year (F.Y.) and 22 % higher as compared to the first eight months of 2019-20 ($ 47.67 billion).
FDI equity inflow received during F.Y. 2020-21 (April to November 2020) is $ 43.85 billion. It is also the highest ever for the first eight months of a financial year and 37% more compared to the first eight months of 2019-20 ($ 32.11 billion), the data revealed.
FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavour of the government to put in place an enabling and investor-friendly FDI policy, the Commerce Ministry said.
The intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. The steps taken in this direction have borne fruit, as is evident from the ever-increasing volumes of FDI inflows being received into the country, it said.
Measures taken by the Government on the FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors.
Q. When the FDI increases, the _________________ of foreign currency increases.
Read the news report given below and answer the question that follow with respect to the same:
NEW DELHI: India’s Foreign Direct Investment (FDI) saw a significant jump in November 2020. FDI data released by the Commerce Ministry shows that total FDI in the month of November 2020 grew by a whopping 81 % to $ 10.15 billion against $ 5.6 billion in November 2019. FDI equity has also jumped to $ 8.5 billion as against $ 2.8 billion in November 2019, registering a growth of 70 %.
India has attracted a total FDI inflow of $ 58.37 billion during April to November 2020. It is the highest ever for the first eight months of a financial year (F.Y.) and 22 % higher as compared to the first eight months of 2019-20 ($ 47.67 billion).
FDI equity inflow received during F.Y. 2020-21 (April to November 2020) is $ 43.85 billion. It is also the highest ever for the first eight months of a financial year and 37% more compared to the first eight months of 2019-20 ($ 32.11 billion), the data revealed.
FDI is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavour of the government to put in place an enabling and investor-friendly FDI policy, the Commerce Ministry said.
The intent all this while has been to make the FDI policy more investor-friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. The steps taken in this direction have borne fruit, as is evident from the ever-increasing volumes of FDI inflows being received into the country, it said.
Measures taken by the Government on the FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors.
Q. Why does the country foster a higher Foreign Direct investment?
Read the news report given below and answer the question that follow with respect to the same:
The rupee rose by 3 paise to settle at ₹ 72.94 (provisional) against the US dollar on Monday, extending its gains for the fifth straight session despite heavy selling in the domestic equity market.
At the interbank Forex market, the rupee opened at ₹ 72.95 against the American currency, and hit an intraday high of ₹ 72.89 and a low of ₹ 72.96 in day trade. It finally finished at ₹ 72.94, higher by 3 paise over its last close. On Friday, the rupee had settled at ₹ 72.97 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.10 per cent to ₹ 90.32. “The rupee has managed to hold its fort around the ₹ 72.90 to 73 levels, but given the sell-off in equities and the likelihood of a rebound in the dollar index, we see the trend tilting slightly towards depreciation going forward,” said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare NSE 0.52 % Broking.
Q. India follows ___________________ system of Foreign Exchange, as per the given report.
Read the news report given below and answer the question that follow with respect to the same:
The rupee rose by 3 paise to settle at ₹ 72.94 (provisional) against the US dollar on Monday, extending its gains for the fifth straight session despite heavy selling in the domestic equity market.
At the interbank Forex market, the rupee opened at ₹ 72.95 against the American currency, and hit an intraday high of ₹ 72.89 and a low of ₹ 72.96 in day trade. It finally finished at ₹ 72.94, higher by 3 paise over its last close. On Friday, the rupee had settled at ₹ 72.97 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.10 per cent to ₹ 90.32. “The rupee has managed to hold its fort around the ₹ 72.90 to 73 levels, but given the sell-off in equities and the likelihood of a rebound in the dollar index, we see the trend tilting slightly towards depreciation going forward,” said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare NSE 0.52 % Broking.
Q. What is the benefit for the appreciation of the Indian Rupees?
Read the news report given below and answer the question that follow with respect to the same:
The rupee rose by 3 paise to settle at ₹ 72.94 (provisional) against the US dollar on Monday, extending its gains for the fifth straight session despite heavy selling in the domestic equity market.
At the interbank Forex market, the rupee opened at ₹ 72.95 against the American currency, and hit an intraday high of ₹ 72.89 and a low of ₹ 72.96 in day trade. It finally finished at ₹ 72.94, higher by 3 paise over its last close. On Friday, the rupee had settled at ₹ 72.97 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.10 per cent to ₹ 90.32. “The rupee has managed to hold its fort around the ₹ 72.90 to 73 levels, but given the sell-off in equities and the likelihood of a rebound in the dollar index, we see the trend tilting slightly towards depreciation going forward,” said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare NSE 0.52 % Broking.
Q. Rupee rose by _________ paise against USD.
Read the news report given below and answer the question that follow with respect to the same:
The rupee rose by 3 paise to settle at ₹ 72.94 (provisional) against the US dollar on Monday, extending its gains for the fifth straight session despite heavy selling in the domestic equity market.
At the interbank Forex market, the rupee opened at ₹ 72.95 against the American currency, and hit an intraday high of ₹ 72.89 and a low of ₹ 72.96 in day trade. It finally finished at ₹ 72.94, higher by 3 paise over its last close. On Friday, the rupee had settled at ₹ 72.97 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.10 per cent to ₹ 90.32. “The rupee has managed to hold its fort around the ₹ 72.90 to 73 levels, but given the sell-off in equities and the likelihood of a rebound in the dollar index, we see the trend tilting slightly towards depreciation going forward,” said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare NSE 0.52 % Broking.
Q. Which of the following is not the reason for the increase in the price of rupees in the Forex Market?
Read the news report given below and answer the question that follow with respect to the same:
The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.
At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.
The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.
On Friday, the rupee had closed at ₹ 72.96 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.
On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.
Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.
Q. How will the devaluation of the Indian Rupee affect exports?
Read the news report given below and answer the question that follow with respect to the same:
The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.
At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.
The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.
On Friday, the rupee had closed at ₹ 72.96 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.
On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.
Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.
Q. How is the exchange rate determined in India?
Read the news report given below and answer the question that follow with respect to the same:
The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.
At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.
The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.
On Friday, the rupee had closed at ₹ 72.96 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.
On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.
Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.
Q. Read the following statements - Assertion (A) and Reason (R).
Assertion (A): Forex reserve of the country will fall.
Reason (R): Due to devaluation of domestic currency.
Select the correct alternative from the following:
Read the news report given below and answer the question that follow with respect to the same:
The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.
At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.
The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.
On Friday, the rupee had closed at ₹ 72.96 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.
On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.
Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.
Q. How will the devaluation of the Indian Rupee affect imports?
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