Multiple choice

Devaluation of currency affects

  1. Fall in domestic values

  2. Increase in domestic values

  3. No effect on domestic prices

  4. None of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Devaluation primarily affects international trade - it makes exports cheaper and imports more expensive. While it can eventually impact domestic prices through inflation, the immediate and primary effects are on foreign trade, not domestic values or prices.

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