Q. When an increase in one form of net exports drives up a country’s exchange rate, it is called as?
Answer: D
Notes:
When an increase in one form of net exports drives up a country’s exchange rate, it is called the Dutch Disease.
- Such instances make other exports noncompetitive in the world market and impair the ability of domestic products to compete with imports.
- The term originated from the supposed effect of natural gas discoveries on the Netherlands economy.
Source: TMH Ramesh Singh
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