Back to Main Page

Multiple Choice Questions

Which of the following factors could contribute to the depreciation of the Indian rupee Monetary pol...........

Economic Affairs Balance of Payments
    Download Solution PDF

    Which of the following factors could contribute to the depreciation of the Indian rupee?

    1. Monetary policy tightening by the US Federal Reserve
    2. Monetary policy easing by the US Federal Reserve
    3. Inflow of foreign funds into India
    4. Outflow of foreign funds from India
    5. Widening trade deficit

    1, 3 and 5 only

    Incorrect Answer

    2, 4 and 5 only

    Incorrect Answer

    1, 4 and 5 only

    Correct Answer

    4 and 5 only

    Incorrect Answer
    छोटे Courses बड़े Results
    Master Balance of Payments
    Prepare through Micro-courses
    Try Now
    Explanation:

    Only codes 1,4 and 5  are correct.
    Reasons for the depreciation of the Rupee include:

    • Rise in crude oil prices
    • Monetary policy tightening by the US Federal Reserve
    • Widening balance of payments and trade deficits
    • Inflation
    • Currency wars
    • Outflow of foreign direct investments and foreign portfolio investments
    • Increase in government debt
    • Political instability
    • Recession

    Hence option 3rd is correct.

    By: Shubham Tiwari
    ProfileResources

    Let's Discuss

    Master
    Balance of Payments
    With abhipedia
    Micro Courses
    Try Now
    What our students have to say
    Review on us
    Download Abhipedia Android App

    Access to prime resources

    Downlod from playstore
    download android app download android app for free