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Question
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 ______.
Options
appreciated
depreciated
revalued
devalued
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Solution
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 depreciated.
Explanation:
Depreciation of domestic currency means fall in the value of domestic currency in relation to foreign currency due to market forces. It means that purchasing power of Indian currency i.e., Rupee has fallen. Now India has to pay ₹ 80 instead of ₹ 70 to buy 1 UK pound (£).
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