1.

Distinguish between depreciation & devaluation of domestic currency. 

Answer»
DEPRECIATIONDEVALUATION
Depreciation of currency means there is a fall in the value of domestic currency in terms of foreign currency in the flexible exchange rate system.Devaluation of currency means there is a fall in the value of domestic currency in terms of foreign currency in the fixed exchange rate system.
Depreciation of currency is dome automatically by the demand & supply of currencyDevaluation is done by the government. 
No government interference is found in the depreciation.No role of market forces, it is deliberately done by the government.


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