IGCSE Development Studies: Specimen Questions with Answers 53 - 54 of 98

Passage

Balance of Trade

Question 53 (3 of 7 Based on Passage)

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Name the products imported and exported by US

Explanation

Imports of US from China and Exports of US to China
Imports of US from China

Exports of US to China

Telephone for cellular networks or for other wireless networks

Aero planes and other aircrafts

Automatic data processing machine

Soya beans

Tricycle, scooters and similar wheeled toys and other toys

Vehicles with only spark ignition, internal combustion reciprocating piston engine

Communication apparatus

Electronics, integrated circuits, processors, and controllers

Question 54 (4 of 7 Based on Passage)

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Explain three ways in which company earns foreign exchange

Explanation

Two Types of Foreign Exchange Rate System Are

  • Fixed exchange rate: Fixed exchange rate is the standard exchange rate set by the monetary authorities for one or more currencies. It provides stability that helps to control inflation and keeps the unit labor cost low. There are chances of less speculation if fixed exchange rate is prevailing in the market.
  • Floating Exchange rate: Under the floating exchange rate, factors of supply and demand decide the value of currency. It gives freedom to set policy interest rates to meet the domestic objectives. It may also help to prevent imported inflation.