If real exchange rate is high, it might lead to:

CA Foundation · Business Economics · MTP · May 2026
If real exchange rate is high, it might lead to:
(A) A. Current account deficit
(B) B. fiscal deficit
(C) C. current account surplus
(D) D. Increase in foreign exchange reserves.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Current account deficit

Topics: International Trade

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