Exchange of Capital

Q. Today, Indian rupees can move to the US, US dollars to China, Chinese Yuan to Italy, and the Euro to India.

Answer the following questions:
(a) What is the movement of currency called?
(b) How is this movement possible?

1. (a) Flow of capital
   (b) Privatisation
2. (a) Flow of technology
   (b) Globalization
3. (a) Flow of capital
   (b) Globalization
4. (a) Flow of technology
   (b) Privatisation

Q. Which of the following is not a way capital flows from one country to another?

1. Movement of Indian rupees in India in exchange of service bought
2. Movement of US dollars to India and Indian rupees to the United States of America
3. Buying of a land property in India by a US citizen
4. Buying of a US company by an Indian citizen

Q. When foreign investors buy land, building, or invest in a domestic company, it is known as .

1. foreign investment
2. direct investment
3. domestic investment
4. indirect investment

Q. <!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Delta Corporation, an international company, wants to invest in India. It can either take controlling ownership in a business entity in India or invest in assets like shares of an Indian company.

Which of the following terms explains the above example?

1. International Capital Investment
2. International Capital Exchange
3. Foreign Exchange of Capital
4. Foreign Capital Investment

Q. <!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Which system has been established to ensure hassle-free and safe movement of capital from one country to another?

1. Foreign exchange system
2. Foreign payment system
3. Global payment system
4. Global financial system

Q. How does movement of capital across countries impact companies?

1. Companies can pay their international suppliers in any currency.
2. Companies can maintain a reserve of foreign currencies that can be used for business operations.
3. The value of domestic currency will reduce, making exports cheaper.
4. Companies can increase the production of goods and services that they sell around the world.

Q. <!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> I consist of several international institutions and banks that facilitate hassle-free international movement of capital.

Who am I?

1. World Trade Organization
2. Global Financial System
3. International Monetary Fund
4. Organization of the Petroleum Exporting Countries

Q. The investments made by foreign investors in a domestic company are a part of which of the following?

1. Foreign capital
2. Foreign currency
3. Foreign investment
4. Foreign investors

Q. <!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Identify which of the following can be considered as a barrier to the entry of foreign capital.

1. High trade barriers
2. Rigid foreign investment policies
3. Lack of capital
4. Low trade barriers

Q. Analyse which of the following is an example of international exchange of capital.

1. Suzuki, a Japanese company, bought Maruti Udhyog Limited, an Indian company.
2. Suhani, an Indian, buys shares of Amazon, an USA-based company, from the US stock market.
3. Sam, an American, sells his house to Michael, another American.
4. Joseph, an Australian, buys land in New Zealand.