What is the effects of increasing …

When we are trying to understand the relationship between foreign exchange rate and national income, then we will have to see the amount of exports and imports done by a country.

If the exchange rate of a country falls with respect to other country then its exports become cheap while imports become expensive.

For example: If exchange rate was US$1= INR 60, and if the exchange rate decreased to US$1=INR 70, then businesses that are selling their products in the US will receive more money. So, if my product was priced at US$5, I was receiving 5*60=INR 300, now the exchange rate depreciated to 70, so for the same priced product in the US that is priced at US$5, I will be receiving 5*70=INR 350. Similarly, for imports, as the exchange rate depreciated to INR 70 and if I want to purchase a smartphone worth US$200; earlier I was paying 200*60=INR 12,000. Now I will paying, 200*70=INR 14,000.