What does it mean when the USD/INR exchange rate increases?

The US dollar weakens against the Indian Rupee. The US dollar strengthens against the Indian Rupee. The Indian Rupee strengthens against the US dollar. Both currencies strengthen simultaneously.

How does the Reserve Bank of India (RBI) determine the USD/INR exchange rate?

By analyzing international currency markets. By using a complex algorithm based on economic indicators. By polling a select group of banks for their bid and ask quotes. By following the guidelines set by the International Monetary Fund.

What is the term used to describe a central bank's stance indicating a likelihood of future interest rate increases?

Dovish Neutral Accommodative Hawkish

Which of the following events would typically lead to the strengthening of a country's domestic currency?

An increase in imports. A widening trade deficit. A decrease in interest rates. An increase in foreign direct investment.

What is the relationship between inflation and currency strength?

High inflation generally leads to currency weakening. There is no direct relationship between inflation and currency strength. High inflation generally leads to currency strengthening. Inflation only affects currency strength in developing economies.