As the Indian rupee depreciates relative to the dollar, total spending on Indian goods and assets will increase. Therefore, in the foreign exchange market, the

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When the Indian rupee depreciates relative to the dollar, it means that more rupees are needed to buy the same amount of dollars. This makes Indian goods and assets cheaper for those holding dollars, leading to an increase in demand for Indian goods and assets. To purchase these, buyers need to convert their dollars into rupees, increasing the supply of dollars in the foreign exchange market. The supply curve of dollars is upward sloping because as the price of dollars in terms of rupees increases, holders of dollars are more willing to exchange them for rupees.

As the Indian Rupee Depreciates Relative to the Dollar, Total