A key effect of devaluation is that it:

CA Foundation · Business Economics · MTP · June 2024
A key effect of devaluation is that it:
(A) A. Makes the domestic currency Cheaper relative to other currencies
(B) B. Makes the domestic currency dearer relative to other currencies
(C) C. Makes the foreign currency Cheaper relative to other currencies
(D) D. Leaves the relative value unchanged

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Makes the domestic currency Cheaper relative to other currencies

Topics: International Trade

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