Question : The Indian government banned import of fans with a view to promote domestic manufacturing and cut imports of spices.
How this will impact demand of foreign currency?

Option 1: Demand for foreign currency will fall

Option 2: Demand for foreign currency will rise

Option 3: Supply for foreign currency will fall

Option 4: Supply for foreign currency will rise

Question

Question : The Indian government banned import of fans with a view to promote domestic manufacturing and cut imports of spices.
How this will impact demand of foreign currency?

Option 1: Demand for foreign currency will fall

Option 2: Demand for foreign currency will rise

Option 3: Supply for foreign currency will fall

Option 4: Supply for foreign currency will rise

Team Careers360 · Accepted Answer

Correct Answer: Demand for foreign currency will fall

Solution : This will reduce the demand of foreign exchange due to decrease in imports.
Hence Option A is correct.

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Question : The Indian government banned import of cars with a view to promote domestic manufacturing and cut imports of batteries.
How this will impact demand of foreign currency?

Question : Selling of securities by foreign institutional investors in Indian capital market with lead to fall in the ___ of foreign currency in the market. The situation might lead to excess _ of foreign currency at prevailing foreign exchange rate.