Question
How can currency depreciation stimulate an increase in net exports?
1. By reducing export costs
2. By reducing import prices
Select the answer using the code given below:
This question was previously asked in
CDS 2 2025 Maths Question Paper (14-Sep-2025)
The correct answer is
1 only
Explanation: Currency depreciation typically **reduces export costs**, making exports more competitive internationally. However, it increases the cost of imports, not reducing them. Therefore, only statement 1 is correct.
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