Question : The liberalization of the external sector in 1991 led to the devaluation of the:
Option 1: US Dollar
Option 2: Indian Rupee
Option 3: Euro
Option 4: Japanese Yen
Correct Answer: Indian Rupee
Solution : The correct answer is (b) Indian Rupee
However, with the liberalization of the external sector, the Indian government adopted a more market-oriented exchange rate regime. This meant that the value of the Indian rupee became more flexible and was determined by market forces of supply and demand.
Initially, the shift to a market-determined exchange rate regime resulted in the devaluation of the Indian rupee. Devaluation means that the value of a currency decreases relative to other currencies. In the case of India in 1991, the devaluation of the Indian rupee occurred as a result of market forces adjusting the exchange rate to reflect the country's economic conditions and external competitiveness.
Question : The liberalization of the external sector in 1991 led to the devaluation of which currency?
Option 1: Indian Rupee
Option 2: US Dollar
Question : The legal tender in India is:
Option 1: US dollar
Option 2: Euro
Option 3: Indian rupee
Option 4: Japanese yen
Question : Which of the following is not a major international reserve currency?
Option 3: Japanese yen
Option 4: Indian rupee
Question : The 1991 economic policy led to the liberalization of which sector in India?
Option 1: Agriculture
Option 2: Healthcare
Option 3: Services
Option 4: Public transportation
Question : The value of US dollar $1 has come down from INR 85 to INR 84. It means that:
Option 1: Indian rupee has appreciated
Option 2: US dollar has depreciated
Option 3: Both (a) and (b)
Option 4: None
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