Home PYQs UPPSC UPPSC MCQs Prelims 2003 (GS Paper I)

Question

Consider the following statements and select the correct answer from the code given below:

Assertion (A): Devaluation of a currency may promote export.
Reason (R): Price of the country’s products in the international market may fall due to devaluation.

Code:

  1. Both A and R are correct and R is the correct explanation of A
  2. Both A and Rare correct but R is not the correct explanation of A
  3. A is correct but R is wrong
  4. A is wrong but R is correct

Answer:

Option A: Both A and R are correct and R is the correct explanation of A

Detailed Solution:

The correct answer is “Both A and R are correct and R is the correct explanation of A ”.

When a country's currency is devalued: Its exports become cheaper for foreign buyers because they need to pay less in their own currency to purchase goods from the devaluing country.