UPSC Prelims 2021— Question 98

A devaluation generally makes domestic exports cheaper in foreign-currency terms and can improve competitiveness, but it does not increase the foreign value of the domestic currency; it reduces it. Trade balance improvement is not necessarily guaranteed because it depends on elasticities, import dependence and other conditions. Therefore the statement that is necessarily true in the exam framing is statement 1. The final answer-key position for Set C identifies option A as the correct option. Option A — 1 only — is correct because it is the alternative that matches the constitutional, historical, geographical, scientific or economic principle established above. Option B — 1 and 2 — is not correct because it does not satisfy the specific condition tested in the question; it represents an alternative that is contradicted, incomplete, or less precise than the accepted answer. Option C — 3 only — is not correct because it does not satisfy the specific condition tested in the question; it represents an alternative that is contradicted, incomplete, or less precise than the accepted answer. Option D — 2 and 3 — is not correct because it does not satisfy the specific condition tested in the question; it represents an alternative that is contradicted, incomplete, or less precise than the accepted answer. For PYQ interpretation, the distinction between the correct alternative and merely related facts is important. UPSC often places plausible distractors beside the precise statement that matches the underlying rule, chronology, definition or empirical relationship. The answer should therefore be read against the exact wording of the question rather than against a broadly related fact.