General Knowledge - Indian Economy - Discussion

Discussion :: Indian Economy - Indian Economy (Q.No.69)


Devaluation of currency leads to

[A]. fall in domestic prices
[B]. increase in domestic prices
[C]. no impact on domestic prices
[D]. erratic fluctuations in domestic prices

Answer: Option B


No answer description available for this question.

Rakesh said: (May 26, 2011)  
I am not sure about my answer but i think devaluation of currency makes our goods competitive in international market and it encourages exporter to export a lot. Hence goods will be send in greater amount for export (out of country) and it will create scarcity in domestic market and hence prices will increase.

Manoj said: (Aug 21, 2011)  
How devaluation of currency increase the domestic prices.

Garima Jain said: (Sep 15, 2011)  
Depreciation in currency makes export cheaper so there is more and more export and less import as currency of our nation depreciated so we have to pay more for importing goods and services. So prices in domestic markets ultimately increases.

Nawaz said: (Jan 10, 2012)  
Devalvation means lowering the value of money against foriegn currency, so it leads to increase in domestic prices.

Kousani said: (Jul 31, 2013)  
Devaluation of currency causes increase in price of imported goods (petroleum, chemicals, capital goods, machineries etc. ) automatically leading to increase production cost. Hence it leads to price increase for domestic goods.

Naina said: (Sep 26, 2013)  
I think devaluation of currency would lead to fall in domestic prices because exports would increase only when domestic prices are lower then the foreign prices, so if we see exports to be increasing as a result of devaluation then necessarily domestic prices should fall in comparison to external prices.

Harjot said: (Jul 3, 2014)  
What is the difference between depreciation and devaluation?

Kulvinder Kaur said: (Jul 24, 2016)  
Depreciation occurs due to the market forces.

Dr.Kulvinder Kaur said: (Jul 24, 2016)  
Devaluation occurs due to the deliberate effort of the govt.

B K Singh said: (Nov 10, 2017)  
No effect in domestic price.

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