ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -(i) Appreciation of currency When the value of domestic currency increases in relation to a foreign currency due to demand and supply forces in the free market, it is termed as appreciation of the domestic currency, (under flexible exchange rate system.)

Detailed explanation-2: -At the point when the conversion standard ascends because of managed floating, it is known as the depreciation or devaluation of the domestic cash. Devaluation is the purposeful descending change of the worth of a country’s cash corresponding to foreign money.

Detailed explanation-3: -Key Takeaways Currency appreciation is the increase in the value of one country’s currency relative to another country’s currency. An increase in government spending or a cut in taxes as well as an increase in investment demand typically causes currency to appreciate.

Detailed explanation-4: -When an exchange rate changes, the value of one currency will go up while the value of the other currency will go down. When the value of a currency increases, it is said to have appreciated. On the other hand, when the value of a currency decreases, it is said to have depreciated.

Detailed explanation-5: -A dirty float is also known as a “managed float.” This can be contrasted with a clean float, where the central bank does not intervene.