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Question
Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?
Export of technical knowledge by the USA to India
Solution
The deterioration of the domestic currency (from ₹ 80 to ₹ 92 per dollar) makes US exports more expensive for Indian purchasers in terms of Indian rupees. As a result, the export of technical knowledge from the USA to India may decline.
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