Differentiate between devaluation and depreciation.
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Devaluation
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Depreciation
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It occurs when the currency exchange rate is officially lowered under fixed exchange rate system.
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When the value of currency falls as compared to other currencies, it is known as depreciation.
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It exists under fixed exchange rate.
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It exists under flexible exchange rate.
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It is due to government’s decision.
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It is due to the demand and supply forces.
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