Initially the exchange rate between rupee and dollar was ₹170 = 2 US dollars. The new exchange rate is ₹ 82=1 $. This means that:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Indian rupee is appreciating
To determine the change in exchange rates between the initial and new scenarios:
Initial exchange rate: ₹170 = 2 $
i.e. 1 $ = 85
New exchange rate: ₹82 = 1 $
This means that the rupee has now appreciated.