"GST has improved India's ranking in terms of ease of doing business. The introduction of GST has attracted foreign investors in large numbers."

What will be the sequential impact of the above on the exchange rate of the rupee in the international money market?

(A) The supply curve of foreign exchange shifts to the right.
(B) The exchange rate starts falling.
(C) There is an appreciation of the rupee on the international money market.
(D) An increase in foreign investment increases the supply of foreign exchange.

Choose the correct answer from the options given below:

(D), (A), (B), (C)

The correct answer is Option (3) → (D), (A), (B), (C)

(D) An increase in foreign investment increases the supply of foreign exchange. This happens because foreign investors bring dollars or other foreign currencies into India for investment.

(A) The supply curve of foreign exchange shifts to the right. The inflow of foreign currency increases the availability of foreign exchange in the market.

(B) The exchange rate starts falling. As the supply of foreign exchange rises, the price of foreign currency in terms of rupees falls.

(C) There is an appreciation of the rupee on the international money market. The fall in the exchange rate means that the rupee becomes stronger or appreciates.