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Devaluation is a
  • a)
    Reduction in the price of domestic currency in the foreign exchange market by the govt.
  • b)
    Reduction in the price of foreign currency in terms of domestic currencies by the govt.
  • c)
    Increase in the price of domestic currency in terms of all foreign currencies by the govt.
  • d)
    Reduction in the price of domestic currency in terms of all foreign currencies by the govt.
Correct answer is option 'D'. Can you explain this answer?
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Devaluation is aa)Reduction in the price of domestic currency in the f...
Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency, group of currencies, or currency standard. Countries that have a fixed exchange rate or semi-fixed exchange rate use this monetary policy tool. It is often confused with depreciation and is the opposite of revaluation, which refers to the readjustment of a currency's exchange rate.
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Devaluation is aa)Reduction in the price of domestic currency in the f...
Explanation:

Devaluation is:
- Devaluation is a deliberate downward adjustment in the value of a country's currency relative to another currency or a standard.
- It is usually done by the government or central bank of a country to improve the country's balance of trade by making exports cheaper and imports more expensive.
- When a government devalues its currency, it lowers the value of its currency compared to other currencies.
- This means that the price of domestic currency decreases in terms of all foreign currencies.
- As a result, exports become cheaper for foreign buyers while imports become more expensive for domestic consumers.
- Overall, devaluation can help boost a country's export competitiveness and reduce trade deficits.
Therefore, the correct answer to the question is option 'D': Reduction in the price of domestic currency in terms of all foreign currencies by the government.
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Devaluation is aa)Reduction in the price of domestic currency in the f...
Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency, group of currencies, or currency standard. Countries that have a fixed exchange rate or semi-fixed exchange rate use this monetary policy tool. It is often confused with depreciation and is the opposite of revaluation, which refers to the readjustment of a currency's exchange rate.
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Read the news report given below and answer the question that follow with respect to the same:The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.On Friday, the rupee had closed at ₹ 72.96 against the American currency.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.Q. How will the devaluation of the Indian Rupee affect imports?

Read the news report given below and answer the question that follow with respect to the same:The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.On Friday, the rupee had closed at ₹ 72.96 against the American currency.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.Q. How will the devaluation of the Indian Rupee affect exports?

Read the news report given below and answer the question that follow with respect to the same:The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.On Friday, the rupee had closed at ₹ 72.96 against the American currency.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.Q. Read the following statements - Assertion (

Read the news report given below and answer the question that follow with respect to the same:The rupee depreciated by 6 paise to close at 73.02 (provisional) against the US dollar on Monday, tracking a rebound in the American currency overseas.At the interbank Forex market, the domestic unit opened at ₹ 72.89 against the US dollar and witnessed an intra-day high of ₹ 72.84 and a low of ₹ 73.15.The local unit finally settled at ₹ 73.02, registering a fall of 6 paise over its previous close, even as the domestic equity market settled with significant gains on Budget day.On Friday, the rupee had closed at ₹ 72.96 against the American currency.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to ₹ 90.78.On the domestic equity market front, the BSE Sensex ended 2,314.84 points or 5 per cent higher at 48,600.61, while the broader NSE Nifty advanced 646.60 points or 4.74 percent to 14,281.20.Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹5,930.66 crore on Friday, according to exchange data.Brent Crude Futures, the global oil benchmark, advanced 0.84 per cent to USD 55.50 per barrel.Q. How is the exchange rate determined in India?

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Devaluation is aa)Reduction in the price of domestic currency in the foreign exchange market by the govt.b)Reduction in the price of foreign currency in terms of domestic currencies by the govt.c)Increase in the price of domestic currency in terms of all foreign currencies by the govt.d)Reduction in the price of domestic currency in terms of all foreign currencies by the govt.Correct answer is option 'D'. Can you explain this answer?
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