Question : Assertion: In 1991, the Indian government revalued the domestic currency.
Reason: This step was taken by the government to increase the inflow of foreign exchange.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Assertion is false, but the reason is true.
Solution : The correct answer is (d) Assertion is false, but the reason is true.
The assertion "In 1991, the Indian government revalued the domestic currency" is false. In fact, in 1991, the Indian government devalued the domestic currency, not revalued it. Devaluation refers to a deliberate decrease in the value of a currency relative to other currencies, making the domestic currency weaker in comparison.
The reason provided, stating that the step was taken to increase the inflow of foreign exchange, is not applicable in this case because the assertion itself is incorrect. Devaluation is often done to improve the competitiveness of domestic industries by making exports more affordable and imports relatively more expensive. It can also help address trade imbalances and boost economic growth.
Therefore, the assertion is false, but the reason is true.
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