12. Suppose that an Indian television set that costs Rs. 28,000 in India costs $ 400 in the United

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States. The exchange rate between the Rupee and the dollar is
(a) 1 dollar per 70 rupees. (b) 1 dollar per 1 Rupees.
(c) 1 dollar per 65 rupees. (१) 2dollar per 70 rupees.

(12 x % = 6 marks)

Section B (Very Short Answers)

Answer any ten questions.
Each question carries 2 marks.

Distinguish between FDI and portfolio investment

What is meant by international capital flows ?

Distinguish between Balance of Payments and Balance of trade.
What is meant by managed floating ?

What are the important functions of foreign exchange markets ?
What are the different accounts of BoP ?

Examine why do nations enter into trade ?

What are the different types of dumping ?

What is meant by Voluntary Export Restraint (VER) ?
Distinguish between domestic trade and international trade.
Explain the export import policy of Mercantilists ?

What is meant by gold standard ?

(10 x 2 = 20 marks)

Section C (Short Essay)

Answer any six questions.
Each question carries 5 marks.

Critically examine the absolute cost theory of international trade.
What are the itiportant factors influencing international capital flows ?
What are the important arguments in favour and against free trade ?

D 70457

What are the important fiscal and monetary policy instruments to correct Bop disequilibrium 3

Examine the relative merits and demerits of flexible and fixed exchange rate systems.

What are the important functions of WTO ?

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