When an Indian importing firm wants to import U.S.-made products, it must first secure permission and dollars from the Reserve Bank of India. This type of restriction is known as a
A) currency devaluation.
B) foreign-exchange control.
C) negative foreign exchange.
D) trade embargo.
E) quota.

Question

Quizplus · Accepted Answer

The restriction mentioned in the question is related to foreign-exchange control, which is the regulation of a country's currency exchange rate and the flow of foreign currency in and out of the country. This is typically handled by a central bank, such as the Reserve Bank of India, and can involve restrictions on importing firms seeking to exchange their currency for dollars to purchase U.S.-made products.

When an Indian Importing Firm Wants to Import U