Q.

Devaluation of money means :

A. decrease in the internal value of money
B. decrease in the external value of money
C. decrease in both internal and external value of money
D. the government takes back currency notes of any denominations
Answer» A. decrease in the internal value of money
Explanation: Devaluation refers to a decline in the value of a currency in relation to another, usually brought about by the actions of a central bank or monetary authority. Devaluation is sometimes used more generally to describe any significant drop in a currency's international exchange rate, although usually a decline caused by market forces with no government intervention is termed a depreciation. Devaluations are most often associated with developing countries that don't allow their currency prices to float freely on the open market.
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