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

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Definitions:

General Journal

A primary accounting record used to record all types of transactions before they are posted to specific accounts in the general ledger.

General Journal

A primary accounting record used to record all types of accounting transactions before they are posted to individual accounts in the general ledger.

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Income earned by businesses or individuals through providing legal services.

General Journal

A fundamental accounting ledger where financial transactions are initially recorded before being transferred to specific accounts in the ledger.