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If Exchange Rates Are Based on Gold, and a Nation

Question 114

Multiple Choice

If exchange rates are based on gold, and a nation devalues its money, goods from the devaluing country become:


A) less expensive to foreign buyers, and foreign goods become less expensive in the devaluing country.
B) less expensive to foreign buyers, and foreign goods become more expensive in the devaluing country.
C) more expensive to foreign buyers, and foreign goods become more expensive in the devaluing country.
D) more expensive to foreign buyers, and foreign goods become less expensive in the devaluing country.

Correct Answer:

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