Devaluation may be the appropriate response to:
A) a strong change in rates of increase in wages in the domestic economy.
B) a higher inflation rate than that in major trading partners.
C) a permanent fall in demand for domestic exports.
D) a permanent rise in demand for domestic exports.

Question

Quizplus · Accepted Answer

A permanent fall in demand for domestic exports would lead to a decrease in the value of the domestic currency, making exports cheaper and more competitive in the international market.

Devaluation May Be the Appropriate Response To