Devaluation of a nation's currency ________.
A) gives foreign companies in the country an edge over domestic companies
B) leads to a decline in the supply of goods and services
C) lowers the price of a country's exports
D) increases consumers' buying power

Question

Quizplus · Accepted Answer

Devaluation of a nation's currency lowers its value in relation to other currencies, which makes its exports cheaper for foreign buyers. This can lead to an increase in demand for exports, as they become more competitive in the global market. This can ultimately lead to a boost in the country's economy as exports increase. However, devaluation can also make imports more expensive, leading to a potential decrease in the supply of goods and services. It can also have negative impacts on domestic companies that may not be able to compete with cheaper imports. Consumers may see an increase in buying power for exported goods, but overall purchasing power may be reduced due to the potential inflation that can result from devaluation.

Devaluation of a Nation's Currency ________