Supply of foreign exchange consists of foreign money earned by import of various goods and services

Finance Jan 22, 2021

Supply of foreign exchange consists of foreign money earned by import of various goods and services. -t yet swered Select one: rked out of 2 O a. False Flag question O b. True

Expert Solution

The above given statement is false.

The correct statement is supply of foreign exchange consists of foreign money earned by Export of various goods and servics.

The correction is exports in place of imports.

Imports are not a source of forex supply, but rather uses up foreign exchange and hence creates demand and not supply. Imports refers to purchasing the goods and services from abroad and making payment for the goods bought.

Exports are the sale of goods and services to other foreign countries and receiving foreign exchange in place of the goods sold. It is a source of foreign exchange.

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