Which of the following is a direct consequence of exchange rate appreciation for an importing country like India?

easy Q2 of 15

Economic Awareness - Sectors of Indian Economy

AImports become cheaper for domestic consumers

BExports become more competitive internationally

CDomestic inflation rises sharply

DTrade deficit automatically worsens

Step-by-Step Solution

Step 1: Understand appreciation effect
Appreciation means the domestic currency gains value against foreign currencies.
Step 2: Impact on imports
A stronger rupee means fewer rupees are needed to buy foreign currency, making imports cheaper for domestic consumers.
Final Answer:
Imports become cheaper for domestic consumers → Option A
Quick Check:
Appreciation = imports cheaper domestically ✅

Quick Trick: Appreciation lowers import costs.

Common Mistakes:

MISTAKES

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