List of top Economics Questions on Foreign Exchange Rate asked in CBSE CLASS XII

Distinguish between Balance of Payment and Balance of Trade.
State one example of External Assistance as a component of capital account.
Using suitable example, distinguish between Foreign Direct Investments (FDI) and Foreign Institutional Investments (FII).
Define Current Account Surplus.
Distinguish between Balance of Payments and Balance of Trade.
Define excess demand.

Identify and explain any one function of Central Bank as indicated in the image given below: 

Calculate the value of ‘Sales’ from the following data:

\[ \begin{array}{|c|l|c|} \hline \textbf{S. No.} & \textbf{Particulars} & \textbf{Amount (in ₹ lakh)} \\ \hline (i) & Subsidies & 200 \\ (ii) & Operating Surplus & 500 \\ (iii) & Opening Stock & 100 \\ (iv) & Closing Stock & 600 \\ (v) & Intermediate Consumption & 3,000 \\ (vi) & Consumption of Fixed Capital & 700 \\ (vii) & Profits & 750 \\ (viii) & \text{Net Value Added at Factor Cost (NVA}_{FC}\text{)} & 2,000 \\ \hline \end{array} \]
Read the following statements – Assertion (A) and Reason (R) carefully.
Assertion (A): Shipping service provided by an Indian company to foreign companies will be recorded in the current account of Balance of Payments (BOP).
Reason (R): Current account of Balance of Payments (BOP) does not alter the status of the asset or liabilities of the residents of India.
Read the following statements carefully:
Statement 1: Keeping other things constant, there exists positive correlation between the price of foreign exchange and its demand.
Statement 2: The foreign exchange rate indicates a country’s purchasing power in international markets.
In the light of the given statements, choose the correct option from the following:
Read the following statements – Assertion (A) and Reason (R) carefully. Choose the correct option from those given below :
Assertion (A): Other things remaining constant, devaluation of domestic currency may lead to rise in National Income of the nation.
Reason (R): Devaluation of domestic currency refers to reduction in the value of domestic currency by the government with respect to foreign currency under the fixed exchange rate system.
Under the ............ Exchange Rate System, the Central Bank can control the foreign exchange rate in a range bound manner.
Market forces of demand and supply, actively interact under ........... exchange rate system to determine the foreign exchange rate. (Choose the correct option to fill in the blank)
Under the ________ Exchange Rate System, the Central Bank can control the rise/fall of foreign exchange rate in a range-bound manner. (Fill up the blank with the correct alternative.)
Identify, which of the following is not a source of demand for foreign exchange for the Indian economy? (Choose the correct alternative.)
Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below: 
Assertion (A): Ceteris Paribus, Devaluation of domestic currency leads to an increase in National Income of a nation. 
Reason (R): Devaluation of domestic currency refers to reduction in the value of domestic currency with respect to foreign currency, under the fixed exchange rate system.