In a fixed exchange rate system, when the government increases the value of foreign currency, this change is called: Option 1: Revaluation. Option 2: Depreciation. Option 3: Appreciation. Option 4: Devaluation.

The answer is 'Devaluation.'. View full solution:

CUET Economics - In a fixed exchange rate system, when the government increases the value of foreign currency, this change is called: | PYQs + Solutions

CUET Economics 2026 20th May Shift 1

Macro

Easy

Revaluation.

Depreciation.

Appreciation.

Devaluation.

✅ Correct Option: 4

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15th May Shift 1

Match the LIST-I with LIST-II

LIST-I	LIST-II
A. Third element of BOP	I. Dirty floating
B. Managed Floating	II. Depreciation of domestic currency
C. When the government makes domestic currency cheaper	III. Errors and omissions
D. When the price of foreign currency in terms of domestic currency has increased	IV. Devaluation

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If India's current account balance is $-58$ million and the capital account balance is $62.5$ million. What will be the errors and omissions to have an overall balance in balance of payments?

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Identify the correct reasons that may affect the demand for foreign exchange in an economy.

(A) Import of visibles.

(B) Export of invisibles.

(D) Purchase of assets abroad.

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CUET Economics 2026 20th May Shift 1 PYQs

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