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प्रश्न
Explain the impact of home currency depreciation on the exports of a nation.
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उत्तर
Impact of home currency depreciation on the exports of a nation:
Domestic currency depreciation refers to a decrease in the value of the domestic currency in relation to foreign currency as a result of market forces.
For e.g., 1 US dollar = ₹ 80 (before )
1 US dollar = ₹ 82 (after depreciation)
Because of the devaluation of the native currency, the purchasing power of the dollar has increased while the purchasing power of the rupee has dropped. Because Indian items are now cheaper in the US, one US dollar can now buy more goods and services. It will result in a rise in Indian exports.
संबंधित प्रश्न
Suppose it takes 1.25 yen to buy a rupee, and the price level in Japan is 3 and the price level in India is 1.2. Calculate the real exchange rate between India and Japan (the price of Japanese goods in terms of Indian goods).
______ occurs when the currency exchange rate is officially lowered under a fixed exchange rate system.
If inflation is higher in country A than in Country B, and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries?
A system that allows adjustment in the fixed exchange rate is referred to as ______
Exchange rate is the price of a currency expressed in terms of:
Suppose, the price of one UK Pound (£) has increased from ₹ 70 to ₹ 80, owing to market forces.
This means that value of Indian Currency (₹) has ______.
Giving valid reason, state whether the following statement is true or false:
Depreciation of the Indian Currency will lead to promotion of Indian exports.
Which are the two main systems of exchange rate determination?
Under the Flexible Exchange Rate System, the exchange rate is determined by which factor?
Under the Fixed Exchange Rate System, the exchange rate is determined by whom?
A rise in domestic currency value under a Fixed Exchange Rate System is called what?
Under Flexible Exchange Rates, equilibrium is reached at which condition?
Higher domestic interest rates attract foreign investment and increase demand for which currency?
Which formula represents Exchange Rate (PPP)?
What is Devaluation under a Fixed Exchange Rate System?
If the fixed rate is above equilibrium, what does RBI do?
If the fixed rate is below equilibrium, what does RBI do?
Under the Bretton Woods System, countries fixed their currencies against which currency?
Which institution supervised the Bretton Woods System?
