An increase in exchange rate implies that the price of foreign currency in terms of domestic currency has increased; this is called ........ Option 1: Appreciation of the domestic currency. Option 2: Devaluation of domestic currency. Option 3: Depreciation of domestic currency. Option 4: Dirty floating.

The answer is 'Depreciation of domestic currency.'. View full solution:

CUET Economics - An increase in exchange rate implies that the price of foreign currency in terms of domestic currency has increased; this is called ........ | PYQs + Solutions

CUET Economics 2025 13 May Shift 2

Macro

Easy

Appreciation of the domestic currency.

Devaluation of domestic currency.

Depreciation of domestic currency.

Dirty floating.

✅ Correct Option: 3