Currency devaluation done by the government leads to which of the following?
Options:
A . Increase in domestic prices
B . No impact on domestic prices
C . Fall in domestic prices
D . Irregular fluctuations in domestic prices.
Answer: Option B Answer: (b) Devaluation is a deliberate downward adjustment to the value of a country’s currency, relative to another currency, group of currencies. Since it is relative to other currencies so the internal price remains unchanged. It causes a country’s exports to become less expensive and imports more expensive.
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