Which of the following would cause Rupee to depreciate against U.S. Dol lar, other things being equal ?
Lower U.S. incomes reduce demand for Indian exports and hence rupees, tending to depreciate the rupee. Higher Indian interest rates, expected rupee appreciation and foreign…
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Which of the following would cause Rupee to depreciate against U.S. Dol lar, other things being equal ?
Answer and explanation
Correct answer B
Lower U.S. incomes reduce demand for Indian exports and hence rupees, tending to depreciate the rupee. Higher Indian interest rates, expected rupee appreciation and foreign investment inflows instead increase demand for rupees, other things equal.
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UGC NET Economics