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

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Balance of payments of an economy is in surplus when__________

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Arrange the given statement in terms of determining the ehange rate through a floating /flexible exchange rate.

(A) Depreciation of domestic currency in terms of foreign currency.

(B) The demand curve shifts upward and right to the original demand curve.

(D) The increase in demand for foreign goods and services result in a change in the exchange rate.

Choose the correct answer from the options given below:

CUET Economics 2023 Slot 6

Match List I with List II

Choose the correct answer from the options given below: