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

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsOpen Economy Macroeconomics2 Marks
Question
Giving two examples, explain why there is a rise in demand for a foreign currency when its price falls.
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Answer

When price of foreign currency falls, imports are cheaper. So more demand for Foreign Exchange by importers.
Tourism abroad is promoted as it becomes cheaper. So demand for foreign currency rises.

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