When a country's currency is devalued
A) output decreases.
B) output increases and the money supply decreases.
C) the money supply decreases.
D) output decreases and the money supply increases.
E) both the output and the money supply increases.

Question

Quizplus · Accepted Answer

When a country's currency is devalued, its goods become cheaper for foreign buyers, potentially increasing exports and output. Additionally, devaluation can lead to an increase in the money supply as the central bank may print more money to support the devaluation.

When a Country's Currency Is Devalued