Assume that exchange rate between the US Dollar and Indian Rupee is $1= ₹55. Now if
this exchange rate increases to $1 = ₹60, then in this case the Indian Rupee has ____
in comparison to the US dollar.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is depreciated i.e.
- Earlier, Rs. 55 was paid to get $1. Now, Rs. 60 are paid to get that same $1.
- It clearly means that the value of Indian currency has depreciated as for the same $1 now more amount of money has to be paid, and the value of US dollar have appreciated as for now US is getting more Indian rupes for same $1.
- Hence, option 1 is correct.