Question

Assertion (A): Appreciation of domestic currency means a rise in the price of domestic currency. Reason (R): Appreciation leads to increase in exports.

* Both (A) and (R) are true, and (R) is the correct explanation of (A).
Both (A) and (R) are true,and (R) is not the correct explanation of (A).
(A) is true, but (R) is false.
(A) is false,but (R)is true.​

Answer 1

Answer:

Ans – c)

Explanation:- Appreciaton of Domestic currency means When domestic currency become stronger, and with less amount of domestic currency fetch more foreign exchange. When ₹74 = $1 becomes to ₹60 = $1 this is called appreciation of domestic currency. Appreciation of domestic currency leads to decrease in exports. As goods becomes costlier to foreigners.

Answer 2

Answer:

The correct option is : Assertion (A) is true, but Reason (R) is false. 

Explanation:

• The term "domestic currency appreciation" When the home currency is stronger, less domestic cash can be exchanged for more foreign currency. It is referred to be local currency appreciation when 74 rupees= 1 dollar becomes 60 rupees= 1 dollar. Exports decline as a result of domestic currency appreciation. items are becoming more expensive for foreigners.

• Furthermore, exports will decrease as a result of a currency's appreciation relative to other currencies, which increases the cost of that nation's goods.
• The increase in value of one country's currency in comparison to another is known as currency appreciation.
• As more of these commodities can now be bought with the same amount of domestic currency, it lowers the price of foreign goods in the home country.
• This results in an increase in imports.
• It reduces consumer interest in domestic goods and increases the appeal of imports.
• To stay competitive, local businesses typically need to reduce expenses and boost productivity.

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