Official Answer Key & Detailed Solution
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Correct Answer: Option (A) — Both A and R are true and R is the correct explanation of A
Concept & Option Breakdown
Standard Reference VerifiedAssertion (A) is true: Devaluation lowers the external value of a nation's currency, stimulating international demand for domestic goods.
Reason (R) is true: Because foreign buyers need less of their own currency to purchase goods priced in the devalued currency, the export prices measured in foreign currency decrease, raising price competitiveness. Therefore, Reason (R) correctly explains Assertion (A).
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