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he US $ exchange rate for rupee is ₹ 75 now, as compared to ₹ 63 previously. This shows that the value of rupee has
  • a)
    depreciated
  • b)
    appreciated
  • c)
    devalued
  • d)
    revalued
Correct answer is option 'A'. Can you explain this answer?
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he US $ exchange rate for rupee is 75 now, as compared to 63 previou...
Answer:

Introduction:
The US dollar (USD) exchange rate for the Indian rupee (INR) is a measure of how much one US dollar is worth in terms of Indian rupees. The exchange rate is determined by various factors such as supply and demand, interest rates, inflation, and economic indicators. When the exchange rate changes, it indicates a change in the value of one currency relative to another.

Explanation:
The given information states that the US dollar exchange rate for the rupee is now 75, compared to 63 previously. Based on this information, we can conclude that the value of the rupee has depreciated.

Defining depreciation:
Depreciation refers to a decrease in the value of a currency relative to another currency. In this case, it means that the value of the rupee has decreased compared to the US dollar.

Reasons for the depreciation:
There can be several reasons for the depreciation of a currency. Some possible reasons in this case could be:

1. Supply and demand: If there is an increase in the supply of rupees in the foreign exchange market or a decrease in the demand for rupees, the value of the rupee will decrease.

2. Interest rates: If the interest rates in India are lower compared to the US, it may discourage foreign investors from holding rupees, leading to a decrease in demand and thus depreciation.

3. Inflation: If there is a higher rate of inflation in India compared to the US, it erodes the purchasing power of the rupee, making it less valuable relative to the US dollar.

4. Economic indicators: If there are negative economic indicators such as slow economic growth, high unemployment, or political instability in India, it can decrease investor confidence and lead to a depreciation of the currency.

Conclusion:
Based on the given information, the US dollar exchange rate for the Indian rupee has increased from 63 to 75, indicating that the value of the rupee has depreciated. This depreciation can be attributed to various factors such as supply and demand dynamics, interest rates, inflation, and economic indicators.
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Community Answer
he US $ exchange rate for rupee is 75 now, as compared to 63 previou...
Price of US Dollar rose from ₹ 63 per unit to ₹ 75 per unit, this shows that the value of domestic currency has fallen over the time period due to market forces. This is known as depreciation of domestic currency.
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he US $ exchange rate for rupee is 75 now, as compared to 63 previously. This shows that the value of rupee hasa)depreciatedb)appreciatedc)devaluedd)revaluedCorrect answer is option 'A'. Can you explain this answer?
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