Economics 2281 · O Level · Foreign exchange rates

Foreign exchange rates — practice question

The diagram illustrates a shift in the exchange rate of the Indian rupee in relation to the US$. What might lead to this change in the exchange rate?

  • Aa decrease in the rate of inflation in India
  • Ban increase in demand for imports by people in India
  • Cgreater foreign direct investment into India
  • Dgreater purchases of its own currency by the Indian central bank

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