Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Which of the following is source of supply for foreign exchange?

Options:

Girdhiraj from Maharashtra importing sandals for his footwear business

Repayment of loan of World Bank

Britenny from Brussels visiting India for an office tour

None of the above

Correct Answer:

Britenny from Brussels visiting India for an office tour

Explanation:

The correct answer is Option 3: Britenny from Brussels visiting India for an office tour

Any transaction that involves receipt of foreign exchange leads to an increase in supply of foreign exchange. 

Here's the analysis of each option:

  1. Girdhiraj from Maharashtra importing sandals for his footwear business: This transaction involves an outflow of domestic currency and inflow of foreign currency, so it is not a source of foreign exchange supply.

  2. Repayment of loan of World Bank: This involves paying back a previous loan, which is a use of foreign currency rather than a source of foreign exchange.

  3. Britenny from Brussels visiting India for an office tour: This transaction involves a foreign national spending money in India, thus bringing foreign currency into the country. This is a source of foreign exchange.