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GK Test 45 (Static)
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If a country 'devalues' its currency, it is likely to have
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A
a fixed exchange rate system
💡 Explanation:
Devaluation involves a deliberate reduction in the currency's value by the government under a fixed exchange rate system. In floating systems, market forces determine value (appreciation/depreciation). Devaluation aims to boost exports and reduce trade deficits.