Suppose That, Using a System of Multiple Exchange Rates, India

question 16

Multiple Choice

Suppose that, using a system of multiple exchange rates, India wishes to discourage investors from sending their funds abroad relative to employing the funds in production for export. If the exchange rate for exports were set at 33⅓ Indian rupees = $1.00, then which one of the following exchange rates for capital transactions would potentially be appropriate for implementing the strategy?

• A) 20 Indian rupees = $1.00
• B) 1 Indian rupee = $0.03
• C) 1 Indian rupee = $0.02
• D) 1 Indian rupee = $0.06

---

Definitions:

Self-concepts

The comprehensive view individuals have of themselves, shaped by personal beliefs, attitudes, and experiences.

Maslow Hierarchy

Maslow's hierarchy is a psychological theory proposed by Abraham Maslow, outlining a five-tier model of human needs, from basic physiological needs to self-actualization, influencing motivation and behavior.

Safety

Being safeguarded against or not prone to danger, risk, or injury.

Self-actualization

The realization or fulfilment of one's talents and potentialities, considered as a drive or need present in everyone.