Explanation:

Increase in exports positively affects the exchange rate. Increase in exports of a country will lead to an increase in demand for the currency and thus its value rises. Hence option 1 is  correct.
• Increase in imports will lead to higher demand for foreign currency and hence the demand for domestic currency reduces. This will negatively affect the exchange rate. Hence option 2 is incorrect.
• Lower interest rate will attract less foreign investors to invest in the country and thus the demand for currency will decrease, resulting in depreciation in value of the currency. Hence option 3 is incorrect.
• Higher inflation rate will make the country uncompetitive in the international market. The exports will fall resulting in decreased demand for the currency and hence lower value. Hence option 4 is incorrect.