Q.

Devaluation usually causes the internal prices to :

A. fall
B. rise
C. remain unchanged
D. None of the above
Answer» C. remain unchanged
Explanation: Devaluation reduces the export price in term of foreign currencies in the world market. As a result the exports are increased so as to increase the revenue of the country. When the exports are increased all efforts are made to increase the production of the country. However, devaluation of currency is in relation to external currencies and external trade. It has effects on a country's international trade by alluring traders. But, internal prices remain unaffected.
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