Under a fixed rate, the government changes the official rate from ₹70 to ₹77 per dollar. This is a

revaluation of the rupee by 10%Correct answerYour answerdepreciation of the rupee by 10%Correct answerYour answerdevaluation of the rupee by about 9%Correct answerYour answerappreciation of the rupee by about 9%Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

An official cut in the rupee's value is a devaluation.
₹1 was worth 1/70 dollar and is now 1/77: a fall of (77 − 70) ÷ 77 ≈ 9% (the dollar's price rose 10%).

Worth noting

'Depreciation' is the market word; when the government moves a fixed rate, it is devaluation.

Concept: Measuring a devaluation
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsThe fixed rate: devaluation and revaluation

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Ten questions from Foreign Exchange Rate, at your own pace.

Under a fixed rate, the government changes the official rate from ₹70 to ₹77 per dollar. This is a

Explanation