Question : Statement1: Revaluation and Appreciation of currency are one and the same thing.
Statement 2: The concepts of demand for domestic goods and domestic demand for goods are same.
Option 1: Both the statements are true.
Option 2: Both the statements are false.
Option 3: Statement 1 is true and Statement 2 is false
Option 4: Statement 2 is true and Statement 1 is false
Correct Answer: Both the statements are false.
Solution : The correct answer is (b) Both the statements are false.
Revaluation and Appreciation of currency are not the same thing. Revaluation refers to an official increase in the value of a currency, usually in a fixed exchange rate system, while Appreciation refers to an increase in the value of a currency relative to other currencies in a floating exchange rate system.
The concepts of demand for domestic goods and domestic demand for goods are not the same. Demand for domestic goods refers to the demand for goods produced within a country, while domestic demand for goods refers to the total demand for goods within a domestic market, including both domestic and imported goods.
Question : Statement1: Devaluation refers to reduction in price of domestic currency in terms of all foreign currencies under fixed exchange rate regime.
Statement 2: Devaluation of the domestic currency makes import cheaper.
Question : Which of the following statement is correct?
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 2 is true and statement 1 is false.
Question : Statement 1: Inferior goods have a negative income elasticity of demand.
Statement 2: When consumer income increases, the demand for inferior goods decreases.
Option 1: Both statements are true.
Option 2: Both statements are false.
Option 3: Statement 1 is true, and statement 2 is false
Option 4: Statement 1 is false, and statement 2 is true.
Question : Assertion: Appreciation and Revaluation of Domestic Currency with respect to foreign currency are one and the same thing.
Reason: Appreciation and Revaluation of domestic currency make the domestic goods relatively expensive. As a result, decrease in exports and increase in imports of the nation are observed.
Option 1:
Both Assertion and Reason are true and correct explanation
Option 2: Both Assertion and Reason are true and incorrect explanation
Option 3: Assertion is true but Reason is false
Option 4: Assertion is false but Reason is true
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