Under flexible exchange rate, when the price of domestic currency in terms of foreign currency increases, it is called ___________.

Correct option is B

Under a flexible exchange rate system, an increase in the price of one domestic currency relative to another indicates that more of the foreign currency can be purchased with the domestic currency than previously. For instance, if the exchange rate is $1 = ₹60 at first, and the price of local currency rises, the value of the foreign currency falls to $1 = ₹50. The term "appreciation of the domestic currency" describes this.