Explain the relation between demand of foreign currency and exchange r – InterviewSolution

1.	Explain the relation between demand of foreign currency and exchange rate.
Answer» There is an inverse relation between demand of foreign currency and exchange rate. Slope of demand curve of dollar is negative, i.e., downward sloping. It means lower the exchange rate higher the demand of dollar in India. In other words, prices of American goods and services will become cheaper in India.

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