A change in the exchange rate of the Indian rupee and the British Pou…

In the above question, we witness a devaluation/depreciation of the domestic currency. We know that devaluation/depreciation of currency is the increase in the exchange rate of 2 countries. It encourages the exports of the country. Devaluation/depreciation of domestic currency make exports cheaper for the foreign country residents, due to which the exports of domestic country increases. Goods which were available at 1 dollar for the foreign residents are now available at 1/2 dollar only because the domestic currency had devalued/depreciated ( earlier 1 dollar = Rs70, now 1 dollar = Rs140). Similarly, the imports become expensive for the domestic country, which results in decrease of imports. Earlier we had to pay Rs70 for importing a product worth 1 dollar, now that will increase to Rs140 due to devaluation/depreciation of domestic currency.