Match List-I with List-II

Choose the correct answer from the options given below:

(A)-(III), (B)-(IV), (C)-(I), (D)-(II)

The correct answer is Option (4) → (A)-(III), (B)-(IV), (C)-(I), (D)-(II)

Devaluation (A): Occurs in a fixed system when the Government intentionally decreases the value of the domestic currency. This means the exchange rate (price of foreign currency) is officially increased.

Revaluation (B): Occurs in a fixed system when the Government officially increases the value of the domestic currency, thereby decreasing the exchange rate.

Depreciation (C): Occurs in a flexible system due to market forces. The domestic currency loses value, meaning the price of foreign currency in terms of domestic currency increases (e.g., instead of ₹80 per dollar, it becomes ₹85 per dollar).

Appreciation (D): Occurs in a flexible system when market forces cause the domestic currency to gain value. This means the price of domestic currency in terms of foreign currency increases. (e.g., instead of ₹80 per dollar, it becomes ₹55 per dollar).