Q. With reference to the economy, consider the following statements about the term "Dutch Disease":

1. It leads to development in the country that results in a large inflow of foreign currency.
2. It has adverse effects on domestic manufacturing sectors, making them less competitive in the international market.

Select the correct option from the codes given below:
Answer: Both 1 & 2
Notes: Dutch Disease refers to a phenomenon where a resource boom (such as oil or gas discovery) leads to significant foreign currency inflow, resulting in currency appreciation. This makes exports from domestic manufacturing sectors less competitive, adversely affecting those industries. Both statements correctly describe different aspects of the Dutch Disease effect.