| Directions : Read the following statements: Assertion [a] and Reason [R]. Choose one of the correct alternative. |
| Assertion (A): Currency appreciation decreases exports and increases imports. |
| Reason (R): Because foreigners have to pay more for buying goods of that country whose currency has been appreciated. On the other hand, to buy a good from foreign country will become less expensive. |
A) Both Assertion [a] and Reason [R] are true and Reason [R] is the correct explanation of Assertion [A].
B) Both Assertion [a] and Reason [R] are true but Reason [R] is not the correct explanation of Assertion [A].
C) Assertion [a] is true but Reason [R] is false.
D) Assertion [a] is false but Reason [R] is true.
Correct Answer: A
Solution :
[a] Both Assertion [a] and Reason [R] are true and Reason [R] is the correct explanation of Assertion [A].
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