Match the List I with List II
| List I | List II | ||
| A. | Foreign currency | I. | Increase in imports |
| B. | Appreciation of currency | II. | Increase in exports |
| C. | Foreign exchange rate | III. | Foreign exchange |
| D. | Depreciation of currency | IV. | Price of foreign exchange |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is option (4) : A-III, B-I, C-IV, D-II
A. Foreign currency :Foreign currency itself is a type of foreign exchange.
B. Appreciation of currency : An increase in the value of a domestic currency is referred to as appreciation. An appreciation in currency makes the imports cheaper resulting in increase of imports. Conversely, the exports become expensive and an appreciation in domestic currency results in decrease in exports.
C. Foreign exchange rate: The foreign exchange rate reflects the price of foreign exchange.
D. Depreciation of currency: Increase in exports: A decrease in the value of a domestic currency is referred to as depreciation. Depreciation n in currency makes the imports expensive resulting in decrease of imports. Conversely, the exports become cheaper and depreciation in domestic currency results in increase in exports.
| List I | List II | ||
| A. | Foreign currency | III.Foreign exchange | |
| B. | Appreciation of currency | I.Increase in imports | |
| C. | Foreign exchange rate | IV.Price of foreign exchange
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| D. | Depreciation of currency | II.Increase in exports | |