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Open Economy Macroeconomics — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsOpen Economy Macroeconomics3 Marks
Question
Distinguish between devaluation and depreciation of domestic currency.
✓

Answer

Under fixed exchange rate regime reduction in price of domestic currency in terms of all foreign currencies is called devaluation Under flexible exchange rate regime. fall in market price of domestic currency in terms of a foreign currency is called depreciation.

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