economics hard True/False

If the Indian Rupee depreciates against the US Dollar, it immediately makes Indian IT service exports more expensive for American clients, thereby reducing the volume of India's software exports.

  1. True
  2. False

Answer: False

Depreciation means the Rupee loses value relative to the Dollar (e.g., moving from Rs. 70 to Rs. 80 per USD). For an American client paying in Dollars, Indian services actually become *cheaper* in dollar terms. Therefore, currency depreciation generally boosts the competitiveness of a country's exports (both goods and services) in the global market, while simultaneously making imports (like crude oil) more expensive for domestic consumers.

Topic International Economics - Exchange Rates
Exam Relevance UPSC Prelims, Banking, SSC
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