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If Rs 150 are required to buy $2, instead of Rs 100 earlier, then:
  • a)
    both depreciation of the domestic currency and rise in the import bill occur
  • b)
    rupee value of import bill will increase
  • c)
    domestic currency has appreciated
  • d)
    domestic currency has depreciated
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
If Rs 150 are required to buy $2, instead of Rs 100 earlier, then:a)bo...
This is a case of depreciation, and the import bill rises as a result. 
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If Rs 150 are required to buy $2, instead of Rs 100 earlier, then:a)both depreciation of the domestic currency and rise in the import bill occurb)rupee value of import bill will increasec)domestic currency has appreciatedd)domestic currency has depreciatedCorrect answer is option 'A'. Can you explain this answer?
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