Q. 22

State the meaning

Answer :

(i) Fixed Foreign Exchange Rate-The fixed exchange rate is the exchange rate as fixed by the government of a country. It is the value of the domestic currency in terms of foreign currency. It remains constant unless the government revises it either upwards or downwards.

(ii) Trade Surplus- The trade surplus is a situation where the value of exports of visible goods is more than the value of the import of visible goods in the same year.

(iii) Accommodating Transactions-An accommodating transaction is a balance of payment transaction which is undertaken to cover the deficit or a surplus in an autonomous transaction.

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