Q19 of 38 Page 1

In recent times the Indian Rupee (<) depreciated to an all-time low against the US dollar ($). Discuss its impact on India’s Imports.

OR


‘‘A country with trade deficit cannot have a current account surplus in its Balance of Payments.’’ Do you agree with the given statement? Discuss with reason.


The Indian Rupee depreciated to an all-time low against the US dollar. ThisThis would have the following impact on India's import:

a. Depreciation of Indian rupee means a fall in the purchasing power of the Indian rupee in terms of the US dollar.


b. This would make foreign goods expensive in India.


c. This would lead to a fall in the demand of goods and services.


OR


● No, I do not agree with this statement.


● A trade deficit occurs when the value of goods imported exceeds the value of goods exported.


● Trade deficit = Value of Imports > Value of exports


● A situation of trade surplus arises when the deficit on trade account is else than the surplus on account of goods.


More from this chapter

All 38 →
17

If Marginal Propensity to Save is 20% and is constant at all levels of income and the autonomous consumption is Rs. 100 crores, construct a consumption function of the given hypothetical economy.

 18

Distinguish between final goods and intermediate goods. Give suitable examples.

OR


If in a locality, a new park is developed by the municipal corporation, it will have externalities, both positive and negative. State one example each of both types of externalities with reason.


 20

Show the inflationary gap using a well-labeled diagram. Suggest any two fiscal measures to correct the situation of inflationary gap.

 20 A

Note: The following question is for the Visually Impaired Candidates only, in lieu of Q. No. 20 :

What is meant by the inflationary gap? Suggest any two fiscal measures to correct the situation of the inflationary gap.