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Quiz on Foreign Exchange Reserves (FOREX)


Quiz on Foreign Exchange Reserves (FOREX)

Quiz on Foreign Exchange Reserves (FOREX)

The General Knowledge Quiz or the 10 Multiple Choice Questions listed below are helpful to various candidates preparing for Bank PO, UPSC Civil Services and SSC, NDA etc exams. Take a look and solve the questions based on FOREX or foreign exchange reserves in India

GK Quiz on FOREX

Take a look at the GK Quiz below consisting of 0 MCQs on Foreign Exchange Reserve in India. The questions would help improve the candidates knowledge on the subject.


Que.1). Foreign Exchange Reserves are held in

a). Domestic Currency

b). Foreign Currency

c). Both a and b

d). Only gold

Ans. b

Que.2). Which country has the largest foreign currency reserve?

a). UK

b). China

c). Japan

d). India

Ans. b

Que.3). Foreign exchange reserve cannot include

a). Banknotes

b). Deposits

c). Bonds

d). None of the above

Ans. d

Que.4). Where are the Foreign exchange reserves held in India?

a). Finance Ministry

b). Central Treasury

c). Reserve Bank of India

d). All the nationalised banks

Ans. c

Que.5). What acts as the first defense for India against the economic slowdown?

a). Foreign Exchange Reserves

b). Securities

c). Gold

d). Domestic Currency

Ans. a

Que.6). How often does the RBI publish a report on management of FOREX?

a). 6 months

b). 3 months

c). 1 year

d). Every month

Ans. a

Que.7). What is true about the exchange rate system of FOREX

i) It is either fixed against gold or some currency in fixed system

ii) In clean floating system, central authority checks fluctuations created by market forces on exchange rate

a). Only i

b). Only ii

c). Both i and ii

d). None of the above

Ans. a

Que.8). What are the benefits of following the fixed exchange rate system?

a). Minimal exchange rate fluctuations

b). Reduction in volatility and fluctuations in prices

c). Imposition of discipline on the monetary authority

d). All of the above

Ans. d

Que.9). What is the nominal exchange rate?

a). Number of units of domestic currency, one must give up to get an unit of foreign currency

b). Price of foreign currency in terms of domestic currency

c). Ratio of foreign to domestic prices, measured in the same currency

d). Both a and b

Ans. d

Que.10). What is Devaluation of currency?

i) When the value of domestic currency decreases in relation to the value of foreign currency (flexible system)

ii) Fall in the value of domestic currency in relation to foreign currency as planned by the Central Bank (Fixed system)

a). Only i

b). Only ii

c). Both i and ii

d). None of the above

Ans. b

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