Devaluation in a fixed exchange rate system occurs when:

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Devaluation in a fixed exchange rate system often occurs when a country decides to reduce the value of its currency relative to other currencies or gold. This can be done by reducing the amount of gold that backs its currency, making its exports cheaper and imports more expensive to stimulate the domestic economy. Choices A, B, and D do not directly relate to the deliberate policy action of devaluing a currency in a fixed exchange rate system.

Devaluation in a Fixed Exchange Rate System Occurs When