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प्रश्न
Explain the relationship between foreign exchange rate and demand for foreign exchange.
स्पष्ट कीजिए
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उत्तर
| Situation | Effect on Foreign Exchange Rate | Impact on Demand for Foreign Exchange |
| Domestic currency depreciates (weaker) | Exchange rate rises (foreign currency becomes costlier) | Demand for foreign exchange falls |
| Domestic currency appreciates (stronger) | Exchange rate falls (foreign currency becomes cheaper) | Demand for foreign exchange rises |
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