A devaluation will make exports _____expensive and imports _____ expensive.

Question

Quizplus · Accepted Answer

In case of devaluation, the local currency loses its value compared to foreign currencies. As a result, exports become cheaper and more competitive in foreign markets, therefore more attractive for foreign buyers. On the other hand, imports become more expensive for local consumers due to the decreased purchasing power of the local currency. Therefore, the correct choice is D, which indicates that exports become less expensive and imports become more expensive after devaluation.

A Devaluation Will Make Exports _____Expensive and Imports _____ Expensive

A Devaluation Will Make Exports _Expensive and Imports _ Expensive