Question

Depreciation of domestic currency leads to rise in exports.

• A. True
• B. False

Answer 1

The correct option is A True

Depreciation of domestic currency makes domestic goods relatively cheaper, which leads to increase in exports.
For example, if a pen costed 1$=Rs 10 then with depreciation of rupee 1$=Rs 15, meaning for the same dollar more pens can be exchanged/bought, thus, leading to increase in exports.