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Recently government of india has doubled …

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Recently government of india has doubled the import duty on gold.what impact is it likely to have on foreign

    • Posted by Lucky Bhatt 4 years, 11 months ago

    CBSE > Class 12 > Economics
    • 1 answers

    Sia ? 4 years, 11 months ago

    Impact on foreign exchange rate due to increase in import duty on gold:

    • The import of gold will fall when the government increases the import duty on gold.
    • This reduces the demand for foreign currency.
    • With the supply of foreign currency remaining the same, the foreign exchange rate would fall. This implies an appreciation of rupees.

    The given graph clearly shows that when the demand for foreign exchange decreases, then its price also decrease.

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