foreign exchange rate for dollar has increased from rupees 50 per Dollar to Rupees 70 per dollar ..identify the concept in this case and explain its effects on the cost of education if you are planning to go to US for higher studies
Dear student,
This is known as rupee devaluation. Devaluation of Rupee refers to the fall in the value of rupee in terms of foreign currency. Specifically, it implies a deliberate official lowering of the value of the country's currency with respect to the foreign currency. Devaluation prevails under the fixed exchange rate regime. This implies that the value of rupee has fallen and the value of the foreign currency has risen. It means that now (after devaluation) one US$ can be exchanged for more rupees. This encourages exports and discourages imports as the former is cheaper now for foreign countries and the latter is expensive for Indians.
Effects on cost of education if you are planning to go to the US for higher studies :
Students, who are already studying abroad or are planning to go abroad, are the worst affected. First, their cost of living goes up significantly as they have to arrange more rupees for the same amount of USD expense abroad. Secondly, their tuition fees expenditure will spike up because now they will need more rupees to pay for the same tuition fees.
Regards,
This is known as rupee devaluation. Devaluation of Rupee refers to the fall in the value of rupee in terms of foreign currency. Specifically, it implies a deliberate official lowering of the value of the country's currency with respect to the foreign currency. Devaluation prevails under the fixed exchange rate regime. This implies that the value of rupee has fallen and the value of the foreign currency has risen. It means that now (after devaluation) one US$ can be exchanged for more rupees. This encourages exports and discourages imports as the former is cheaper now for foreign countries and the latter is expensive for Indians.
Effects on cost of education if you are planning to go to the US for higher studies :
Students, who are already studying abroad or are planning to go abroad, are the worst affected. First, their cost of living goes up significantly as they have to arrange more rupees for the same amount of USD expense abroad. Secondly, their tuition fees expenditure will spike up because now they will need more rupees to pay for the same tuition fees.
Regards,