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If the Indian rupee depreciates against the US dollar, which effect is most likely, other things remaining constant?

Indian exports become cheaper for buyers paying in dollars, because a depreciated rupee means each dollar buys more rupees. Imports, overseas fees and dollar-denominated debt all cost more in rupee terms, so those alternatives describe the opposite effect.

  1. AImports into India become cheaper in rupee terms
  2. BIndian exports become cheaper for buyers paying in dollarsCorrect
  3. CIndian students studying in the USA pay fewer rupees in fees
  4. DForeign debt in dollars becomes easier to repay in rupee terms

Explanation

When the rupee depreciates, one dollar buys more rupees, so Indian goods priced in rupees cost fewer dollars to foreign buyers. Imports, foreign fees and dollar debt all become costlier in rupee terms, so the other options are wrong.

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