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

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Q: 99 (IAS/1999)

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.

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,177,48,177,23,19,6

keywords: 

{'currency': [0, 1, 0, 3], 'international market': [0, 1, 0, 0], 'devaluation': [0, 3, 0, 3], 'export': [0, 0, 1, 0], 'products': [1, 3, 4, 8]}

The correct answer is "Both A and R are true, and R is the correct explanation of A."

Assertion (A) states that devaluation of a currency may promote export. This means that when a currency is devalued, it can have a positive impact on a country`s export performance.

Reason (R) explains that the price of the country`s products in the international market may fall due to devaluation. This means that when a currency is devalued, the price of the country`s goods and services in terms of foreign currencies decreases, making them more competitive and attractive to international buyers.

The reason provided (R) offers a clear explanation of why devaluation can promote export. When a country`s products become relatively cheaper in the international market, it enhances their competitiveness and increases the likelihood of export growth.

Therefore, both the assertion (A) and the reason (R) are true, and the reason correctly explains the assertion.