As a policy instrument, currency devaluation may be controversial since it
A) imposes hardships on the exporters of foreign countries.
B) imposes hardships on exporters of the devaluing country.
C) is generally followed by unemployment in the devaluing country.
D) is generally followed by price deflation in the devaluing country.

Question

Quizplus · Accepted Answer

Currency devaluation makes a country's exports cheaper and more competitive in the global market, which can impose hardships on exporters in foreign countries as they find it harder to compete on price.

As a Policy Instrument, Currency Devaluation May Be Controversial Since