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Economics · 2026 · 3 marks
CBSE 2026 · Region 3 · Set 3 · Q12
Keeping other factors constant, explain how a spending of foreign tourists in the home country and fees payments of overseas students affect the…
Keeping other factors constant, explain how a spending of foreign tourists in the home country and fees payments of overseas students affect the demand and supply of foreign exchange.
Marking-scheme solution
Keeping other factors constant, the given situations may have the following likely impacts:
Spending of foreign tourists in the home country will ensure greater inflow of foreign exchange, leading to an increase in the supply of foreign currency.
Any spendings on account of fees and expenses by students from/to the home country to/from abroad will lead to outflow/inflow of foreign exchange, leading to an increase in the demand/supply of foreign currency.
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CBSE Class 12 Economics past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.