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Foreign Exchange

If FOREX rese...

Question

If FOREX reserves are rising, which of the following could be the causes?

A

Increase in imports

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B

Falling BOP

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C

Rising BOP

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D

Increase in exports

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Solution

The correct options are
C
Rising BOP

D
Increase in exports

If exports increase, the implication is that the BOP is also rising. When these two phenomena occur, FOREX reserves will increase.

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