In economic language, which of the following term used drop in Indian Rupee?
[A] Devaluation
[B] Depreciation
[C] Deflation
[D] Depression
Show Answer
Correct Answer: B [Depreciation]
Notes:
Devaluation’ means official lowering of the value of a country’s currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency.
In contrast, depreciation is used for the unofficial decrease in the exchange rate in a floating exchange rate system.
