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Questions › UGC-NET › UGC-NET 2026 › Q35
2 marksInternational Economics › Balance of payments and exchange rates › Devaluation, the Marshall-Lerner condition and the J-curveModerateabout 1 min

UGC-NET 2026 Question 35: Balance of payments and exchange rates

Devaluation of Currency has the following effects:
A. Changes relative domestic price
B. Increases the tax value of domestic currency
C. Increases the competitiveness of export in foreign market
D. Correct the Balance of Trade, under condition that domestic demand is elastic

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Balance of payments and exchange rates has come up 120 times in 7 exams since 2007.

What this question tests

This question is on Devaluation, the Marshall-Lerner condition and the J-curve, part of Balance of payments and exchange rates in International Economics.

When a fall in the currency improves the trade balance and why it may first worsen it.

TestStop has 16 past-paper questions on this subtopic; the nearest in year are below.

  • IIT JAM 2022 · Q35The real exchange rate is e = EP/P^⋆, where e is the price of domestic goods in terms of foreign goods, E is…
  • GATE 2021 · Q4If the sum of price elasticities of imports and exports of a country exceeds unity, then a depreciation of…
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Question from the UGC-NET 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.