Question: Define and discuss what is meant by an exchange rate. Then, discuss how exchange rates vary in a flexible exchange rate system.
Use the attached 10 year historical exchange rate chart for the Indian Rupee (INR) and the U. S. Dollar and discuss the general periods of Appreciation of the INR/$ exchange rate and the general periods of Depreciation of the INR/$ exchange rate. In your discussion, indicate what variables might be influencing the exchange rate and causing it to change or to trend in one direction.