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A commercia! policy designed to increase exports by an additional sum above the domestic price
per unit exported is known as:

(a) Grants in aid. (b) Tax concession.

(c) Targeting. (d) Export subsidy.
The Watch dog of international trade is :

(a) European Union. (b) WTO.

(c) IMF. (d) World Bank.

A systematic record of all transactions between the residents of one country and the rest of the
world :

(a) Balance of Payments. (b) Balance of Trade.

(c) Current Account. (d) Capital Account.
The price of one currency in terms of another currency is called :

(a) Depreciation. (b) Devaluation.

(c) Exchange rate. (d) Foreign exchange.
The act of avoiding a foreign exchange risk arising from an agreed forward rate is called :

(a) Speculation. (b) Arbitrage.

(c) Hedging. (d) Dumping.
International Monetary Fund started functioning on :

(a) 1944. (b) 1947.

(c) 1995. (d) 1982.

(12 x % = 6 marks)
Part B (Very Short Answer Questions)
Answer any ten questions.
Each question carries 2 marks.

Define internal trade.

What is meant by import substitution ?

Write a note on capital account.

Explain currency convertibility.

Briefly explain about European Union.

What is meant by overvaluation of currency ?