Foreign Exchange Market MCQ Quiz

Looking for a fun and easy way to test your knowledge of the foreign exchange market? Look no further than this quick quiz! Simply answer the multiple choice questions below to see how much you know about this vital part of the global economy.

Take our Foreign Exchange Market MCQ Quiz with answers. This quiz covers the most important aspects of the Foreign Exchange Market and is a great way to test your understanding of this complex subject.

Question 1: From which year was the FEMA Promulgated?

(A) 2003

(B) 2002

(C) 2000

(D) 1999

Question 2: Under free exchange market the rate of foreign exchange is determined by __________.

(A) Balance of Payments Theory

(B) Purchasing Power Parity Theory

(C) Mint par Theory

(D) None of the above

Question 3: The development is ___________.

(A) reduction of prices

(B) deficit financing

(C) loans from World Bank and I.M.F.

(D) reduction in the value of currency in terms of gold

Question 4: Which of the following authority sanctions foreign exchange for the import of goods?

(A) Any nationalised Bank

(B) Exchange Bank

(C) Reserve Bank of India

(D) Ministry of Finance

Question 5: The term ‘Paper Gold’ means __________.

(A) special drawing rights of the I.M.F.

(B) special accommodation facility of the World Bank

(C) currencies still on Gold standard

(D) deficit financing

Question 6: India, Foreign Investment Promotion Board now works under __________.

(A) Reserve Bank of India

(B) Ministry of External Affairs

(C) Ministry of Commerce

(D) Ministry of Finance

Question 7: The Forex Reserve in India have been witnessing continuous growth due to following reasons.

1. Rise in FDI inflows
2. Gifts from Foreign Countries
   
3. High interest regime in the country
   
4. Huge inflows of FIIs funds
   
5. Remittances from Indians working abroad

Select the correct answer from the given codes. 

(A) 1, 3, 4, 5

(B) 1, 2, 3, 4

(C)1, 2, 4, 5

(D) 2, 3, 4, 5

Question 8: Consider the following statements and choose the correct answer with the help of codes given.

• Assertion (A): In the recent past, there has been a significant increase in foreign exchange reserve of India.
  
• Reason (R): Invisible exports have been much higher than invisible imports in terms of dollars.

(A) Both (A) and (R) are true and (R) is the correct explanation of (A)

(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

(C) (A) is true, but (R) is false

(D) (A) is false, but (R) is true