In a fixed exchange rate system, when the government increases the value of foreign currency, this change is called:
In a fixed exchange rate system, when the government increases the value of foreign currency, this change is called:
Solution
✅ Correct Option: 4
Under a fixed exchange rate system, a deliberate government decision that raises the value of foreign currency, i.e., lowers the value of the domestic currency, is called devaluation. A similar fall under a flexible system is depreciation.
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