If the rupees per US Dollar exchange rate changes from Rs. 60 to Rs. 6

1.	If the rupees per US Dollar exchange rate changes from Rs. 60 to Rs. 65 in a time period by the market forces, it implies1. Appreciation of Rupee2. No change in exchange rate3. Depreciation of Rupee4. Devaluation of Rupee
Answer» Correct Answer - Option 3 : Depreciation of Rupee The correct answer is Depreciation of Rupee. The term devaluation is used when the government reduces the value of a currency under a Fixed-Rate System. When the value of the currency falls under the Floating Rate System and due to market forces, it is called depreciation. Depreciation takes place under flexible exchange rate system. If the rupees per US Dollar exchange rate changes from Rs. 60 to Rs. 65 in a time period by the market forces, it implies Depreciation of Rupee. Devaluation is the process of reducing a country's exchange rate in the international market while keeping the internal value unchanged. The rupee was devalued first in 1966 by 57% from Rs. 4.76 to 7.50 against the US dollar. In the year 1991, the rupee was again devalued by 19.5% from Rs.20.5 to Rs.24.5 against the US dollar. Some of the objectives of Devaluation- correcting the balance of payment. for increasing the exports for decreasing imports

If the rupees per US Dollar exchange rate changes from Rs. 60 to Rs. 65 in a time period by the market forces, it implies1. Appreciation of Rupee2. No change in exchange rate3. Depreciation of Rupee4. Devaluation of Rupee

Answer» Correct Answer - Option 3 : Depreciation of Rupee

The correct answer is Depreciation of Rupee.

The term devaluation is used when the government reduces the value of a currency under a Fixed-Rate System.
When the value of the currency falls under the Floating Rate System and due to market forces, it is called depreciation.
Depreciation takes place under flexible exchange rate system.
If the rupees per US Dollar exchange rate changes from Rs. 60 to Rs. 65 in a time period by the market forces, it implies Depreciation of Rupee.
Devaluation is the process of reducing a country's exchange rate in the international market while keeping the internal value unchanged.
The rupee was devalued first in 1966 by 57% from Rs. 4.76 to 7.50 against the US dollar.
In the year 1991, the rupee was again devalued by 19.5% from Rs.20.5 to Rs.24.5 against the US dollar.
Some of the objectives of Devaluation-
- correcting the balance of payment.
- for increasing the exports
- for decreasing imports