Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

What is the difference between revaluation and appreciation of foreign currency?

Options:

Revaluation and appreciation are same

Revaluation links with market forces whereas, appreciation links with government

Revaluation links with government whereas, appreciation links with market forces

These 2 are totally different terminologies

Correct Answer:

Revaluation links with government whereas, appreciation links with market forces

Explanation:

Revaluation is the term used when exchange rate is influenced due to government whereas, appreciation is the term used when exchange rate is influenced due to market forces of demand and supply. In both the case the exchange rate falls.