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Economics/currency value difference

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Question
Hi,
  I livining in india.One US dollor is 42 indian rupee.How the difference comming?explain me in simple & with example.

Answer
The exchange rate is the price of one currency in terms of another currency. Basically, the exchange rate for a currency comes from a relationship between the monetary base --domestic currency--- and the amount of reserves in hard currencies and precious metals in the monetary authority.  Hope this helps.

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any related to economic analysis and evolution of the economy and economics.

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20+ years in financial services and economic analysis. Teaching experience at grad level.

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MPA from Harvard University
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