one of the first visible effects of currency depreciation is the country imports because of 1 more e...........

one of the first visible effects of currency depreciation is the country imports because of :

1. more expensive and exports cheaper.

2. it takes more rupees to pay for the same quantum of imports and few dollars for a buyer to pay for the same quantity of exports.

3.more expensive imports are likely to drive inflation upward, especially in india.

4. a depreciating rupee also impacts the oil import bill.

1 and 2

2,3,4

3 and 4

all of the above

Explanation:

- Statement 1: When a currency depreciates, imports become more expensive because you need to spend more of the local currency to buy foreign goods. Conversely, exports become cheaper for foreign buyers.

- Statement 2: A depreciated currency means you need more of the local currency to buy the same amount of foreign goods, while foreign buyers need less of their currency for the same amount of exports.

- Statement 3: Expensive imports can push inflation higher, as higher costs are passed on to consumers. This is particularly relevant for India, which relies heavily on imported goods.

- Statement 4: A depreciating currency increases the cost of oil imports, affecting the oil import bill. This impacts overall expenses significantly, especially in countries like India.

Correct Answer:

Option 4: all of the above