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प्रश्न
If demand for foreign currency decreases, what happens to the exchange rate and domestic currency?
विकल्प
Exchange rate falls and domestic currency appreciates
Exchange rate rises and domestic currency depreciates
Exchange rate rises and domestic currency revalues
Exchange rate is maintained by RBI buying foreign exchange
MCQ
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उत्तर
A decrease in demand for foreign currency causes the exchange rate to fall. As a result, the domestic currency appreciates under the Flexible system.
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