CUET Economics 2025 30 May Shift 2 PYQs

Choose the correct statements from the following in respect of exchange rate system.

(A) Floating Exchange Rate exchange rate is determined by the market forces of demand and supply.

(B) In a fixed exchange rate system, making domestic currency cheaper is called Devaluation.

(C) Increase in exchange rate implies that the price of foreign currency has increased and is called depreciation.

(D) Exchange rates between any two currencies adjust to reflect differences in the price levels in the two countries.

Choose the correct answer from the options given below:

Under a flexible exchange rate, when the price of domestic currency in terms of foreign currency increases is called?

1. Depreciation of domestic currency.
2. Appreciation of domestic currency.
3. Devaluation of domestic currency.
4. Revaluation of domestic currency.

In modern economies, countries interact through various channels, Which market is not an example of these linkages?