CBSE 2014 Class 12 Economics Outside Delhi Set-3

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Question : 3
Total: 5
Explain the effect of appreciation of domestic currency on exports?
Solution:  
When the price of domestic currency rises, it is called the appreciation of domestic currency. The benefit of appreciation of domestic currency is that we will require less currency to buy foreign currency. Because of this foreign buyer will have to pay high price for the domestic good. It will decrease in their demand. i.e. reduces exports.
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