1.

Other things remianing unchanged, when in a country the price of foreign currency rises, national income is : (choose the correct alternative)

Answer»

Likely to rise
Likely to FALL
Likely to rise and fall both
Not affected

Solution :When the prices of foreign currency rises, the national income is likely to rise. This is because rise in foreign prices will LEAD to increase in the ONE of the components of national income i.e. net exports. That is, exports will increase and IMPORTS will DECREASE (as imports have become expensive), this will ultimately lead to increase is national income.


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