Option 1 -> Depreciation occurs due to market forces in a floating exchange rate system, not government action.
Option 2 -> Devaluation is a deliberate government action to reduce currency value in a fixed/managed exchange rate system.
Option 3 -> Revaluation is when government increases currency value, making it more expensive, not cheaper.
Option 4 -> Appreciation occurs due to market forces causing currency to gain value, not government intervention.
Hence, Devaluation -> When a government deliberately intervenes to lower the exchange rate of its domestic currency in a fixed or managed exchange rate system, it is called devaluation. This makes exports cheaper and imports more expensive, often used to improve trade balance. The key distinction is that devaluation is an official government policy action, whereas depreciation happens naturally through market forces in floating exchange rate systems.-> correct