Question

If Rs 150 are required to buy $2, instead of Rs 100 earlier, then:

• A. both depreciation of the domestic currency and rise in the import bill occur
• B. rupee value of import bill will increase
• C. domestic currency has appreciated
• D. domestic currency has depreciated

Answer 1

The correct option is A

both depreciation of the domestic currency and rise in the import bill occur

This is a case of depreciation, and the import bill rises as a result.