Question

Match List - I with List - II. List - I (Key term):
A. Appreciation
B. Devaluation
C. Depreciation
D. Revaluation
List - II (Explanation):
I. This occurs when a currency increases in value relative to other currencies under a floating exchange rate system.
II. This occurs when the value of a currency in a fixed exchange rate is officially and deliberately reduced.
III. This occurs when a currency falls in value relative to other currencies under a floating exchange rate system.
IV. This occurs when the price of a currency operating in a fixed exchange rate system is officially and deliberately increased. Choose the correct answer from the options given below:

• A. A-I, B-II, C-III, D-IV
• B. A-III, B-II, C-IV, D-I
• C. A-IV, B-II, C-III, D-I
• D. A-II, B-I, C-IV, D-III

Hint:

Appreciation and depreciation occur in floating exchange systems.

Answer 1

The Correct Option is A

Concept:
Exchange rate terms describe changes in the value of currencies under fixed or floating exchange systems.

Step 1:
Appreciation means a currency increases in value under a floating exchange rate system. \[ A \rightarrow I \]

Step 2:
Devaluation means the government officially reduces the value of currency in a fixed exchange rate system. \[ B \rightarrow II \]

Step 3:
Depreciation means the value of a currency decreases naturally in a floating exchange system. \[ C \rightarrow III \]

Step 4:
Revaluation means officially increasing the value of a currency in a fixed exchange system. \[ D \rightarrow IV \]

Step 5:
Thus, the correct arrangement is: \[ A-I,\ B-II,\ C-III,\ D-IV \] \[ \boxed{\text{(1) A-I, B-II, C-III, D-IV}} \]