Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Liberalisation, Privatisation and Globalisation - An Appraisal

Question:

Which of the following refers to decrease in the domestic currency by the government and market forces ?

Options:

Government - Appreciation

Market forces - Revaluation

Government - Revaluation

Market forces - Appreciation

Government - Devaluation

Market forces - Depreciation

Government - Depreciation

Market forces - Devaluation

Correct Answer:

Government - Devaluation

Market forces - Depreciation

Explanation:

When the exchange rate is influenced by the government, it is known as Devaluation (decrease in value of domestic currency) /Revaluation of currency(increase in value of domestic currency)

When the exchange rate is influenced by the market force of demand and supply, it is known as Depriciation (decrease in value of domestic currency) /Appreciation of currency (increase in value of domestic currency)