McqMate
| Q. |
The outcome of 'devaluation of currency' is - |
| A. | increased export and improvement in balance of payment |
| B. | increased export and foreign reserve deficiency |
| C. | increased import and improvement in balance of payment |
| D. | increased export and import |
| Answer» A. increased export and improvement in balance of payment | |
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Explanation: Devaluation is a reduction in the exchange value of a country's monetary unit in terms of gold, silver, or foreign currency. By decreasing the price of the home country's exports abroad and increasing the price of imports in the home country, devaluationencourages the home country's export sales and discourages expenditures on imports, thus improving its balance of payments. |
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