| Assertion [A] Demand for foreign exchange and exchange rate moves in the same direction. |
| Reason [R] When exchange rate rises domestic goods becomes cheaper in international market. |
A) Assertion [A] is true and Reason [R] is a correct reason of Assertion [A].
B) Assertion [A] is true and Reason [R] is not a correct reason of Assertion [A]
C) Assertion [A] is false, but Reason [R] is true
D) Both are false
Correct Answer: C
Solution :
Demand for foreign exchange and exchange rate are inversely proportional, i.e., with increase in one other fall and vice-versa.
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