Question: 1. Explain how foreign exchange rates are determined. 2. Discuss the purchasing power parity theory 3. What are the objectives and methods of exchange control?

1. Explain how foreign exchange rates are determined.

2. Discuss the purchasing power parity theory

3. What are the objectives and methods of exchange control? 4. Write notes on the following:

Foreign exchange

Foreign exchange market

Spot and forward exchange rates

Arbitrage

Balance of Payments theory

Stable exchange rate system

Flexible exchange rate system

Exchange rate classifications

11. Write notes on the following:

Non-competing groups

Factor endowment

Factor intensity reversals

Heckscher-Ohlin theorem

Factor price equalization theorem.

Leontief paradox

Intra-industry trade

Technological-gap model

Product Cycle Theory

Availability and non-availability approach

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