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प्रश्न
If demand for foreign currency increases, what happens to the exchange rate?
विकल्प
Exchange rate is fixed by Government / Central Bank (RBI)
Demand (DD) becomes equal to zero
Exchange rate rises
Exchange rate falls
MCQ
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उत्तर
An increase in demand for foreign currency raises the exchange rate. The domestic currency depreciates, while the foreign currency appreciates.
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