GyanGramQuestion
Consider the following actions which the Government can take:
1. Devaluing the domestic currency.
2. Reduction in the export subsidy.
Which of the above action/actions can help in reducing the current account deficit?
PRELIMS 2011 · INDIAN ECONOMY
Consider the following actions which the Government can take: 1. Devaluing the domestic c…
Attempt this previous-year question. The correct option stays hidden until you choose.
Pick an option to check yourself.
• Correct Answer: A
• Devaluation makes exports cheaper and imports costlier, narrowing the current account deficit.
• Reducing export subsidies makes domestic goods less competitive, worsening the deficit.
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