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Balance of Payments - Difference between Devaluation and Depreciation 2011

Question

Mention one difference between devaluation and depreciation of currency. How can depreciation of currency be a measure

to correct disequilibrium of Balance of Payments?

It is a 3 mark question appeared in 2011 ISC board examination.

Devaluation:

Reducing the external value of the domestic currency by monetary authority

by a legal edict is called devaluation.

The value of the home currency in terms of all the world currencies will fall.

Depreciation:

Reducing the value of the of the domestic currency

by the market forces is called depreciation.

In this case the external value of the home currency will fall

against certain specific currencies involved in active trade.

Depreciation as a measure to correct disequilibrium of Balance of Payment:

After depreciation the external value of the domestic currency will fall .

It will increase the inflow of foreign exchange

and reduce the outflow of foreign exchange.

For example,

assume the existing rate is $.1 = Rs. 50.

After depreciation,

the rate of exchange will become

$.1=Rs.60.

This will encourage the exporters to export more.

Prior to depreciation, each $.1 worth of export fetches Rs.50.

After depreciation,

the same export brings in Rs.60.

From each transaction the exporter gets

Rs.10 more.

Thus it encourages export.

Depreciation discourages import.

Before depreciation, importer spends Rs.50 to buy $.1 worth of good.

After depreciation,

the importer has to pay $.10 more to import the same good.

Thus depreciation increases export on the one hand

and discourages import on the other hand

and brings about equilibrium in the balance of payment.

For more infomation >> Balance of Payments Difference between Devaluation and Depreciation - Duration: 3:09.

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What's the difference between torque values? - Duration: 3:31.

Hi, I'm Damien Feller, responsible for Technical Support at Chicago Pneumatic.

One key element to consider when specifying your tool is how much torque – or in other words power - it needs to complete the job.

But what does torque really mean?

We've seen many customers confused about torque when choosing their tools, and it's easy to understand why.

Not only are there various ways to describe torque, for example,

working torque, maximum torque, breakaway torque, nut busting torque,

there are also no industry standards related to measuring torque.

So, even if manufacturers use the same term for torque, they do not necessarily mean the same thing.

Testing varies enormously.

The most important factor to look at with torque value is timing.

How much time do you need to run the tool for in order to reach your required torque?

Each tool has its own performance scale depending on its design, and it will reach

a given level of torque after a different amount of time.

From our experience, in real world applications,

a typical tightening job should be completed within 4 seconds.

So, the tool should reach the required torque within this time.

Here, at Chicago Pneumatic, we call this the working torque.

However, for untightening, or more exceptional jobs, it may take longer, and in this case it's acceptable for the task to take up to 10 seconds.

We describe this as Maximum torque.

When some manufacturers use other terms, for example, nut busting torque,

the amount of time for the tool to reach its torque level is rarely specified.

Users should be aware that in these cases torque is often over-marketed, and the product will under-deliver.

To illustrate the difference between a working torque and a maximum torque value, let's look at two of our tools that,

on paper, can do the same job. The first is a CP7732C ½" stubby impact wrench,

and the second is a CP7749 impact wrench.

We can clearly see that both tools achieve the same result, but the second one takes much longer.

My advice is that if the tool cannot reach the targeted torque in an appropriate time for your application,

you should think about changing your tool and choosing one that is more suitable for the job.

However, torque value shouldn't be your only consideration, and it's important to

look at data that can be easily compared, for example, timing, hose length or air pressure.

Ultimately, there is nothing better than real life tests.

Here at Chicago Pneumatic we understand that specifying tools can be complex,

and we work with customers every step of the way, giving expert guidance on the best tools for the job.

Thanks for watching the video and if you want more information, please visit our website www.cp.com!