Option 1 -> Starts with demand curve shift before the initial increase in demand, which is illogical.
Option 2 -> Begins with depreciation, which is the outcome, not the starting point.
Option 3 -> Places depreciation before the change in exchange rate, disrupting the cause-effect sequence.
Option 4 -> Follows the correct logical sequence: initial increase in demand → graphical shift → exchange rate change → currency depreciation.
Hence, Option 4: (C), (B), (D), (A) -> The correct sequence in a floating exchange rate system starts with (C) increased demand for foreign goods/services, which causes (B) the demand curve to shift upward and rightward, leading to (D) a change in the exchange rate, ultimately resulting in (A) depreciation of the domestic currency as more domestic currency is needed to buy foreign currency for purchasing foreign goods. This chain of events demonstrates how market forces determine exchange rates in a flexible exchange rate regime. -> correct