Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

"Rajesh and Ram went to Japan for attending a conference and then travelled across the country for 7 days."

Which of the following stands to be true in regards to the above statement?

Options:

It resulted in inflow of foreign exchange 

It resulted in outflow of foreign exchange

Supply for foreign exchange increased

Both 2 and 3

Correct Answer:

It resulted in outflow of foreign exchange

Explanation:

When Ram and Rajesh travelled across the nation, they must have spent in Japanese Yen. That means the demand for Japanese Yen/foreign currency increased, which resulted in outflow of foreign exchange.