If Canada wanted to reduce the cost of its goods in foreign markets,it could
A) revalue its currency.
B) devalue its currency.
C) pay off its trade deficit.
D) borrow from the Exim bank.
E) sell more goods abroad.

Question

Quizplus · Accepted Answer

By devaluing its currency, Canada will lower the price of its goods in foreign markets, making them more competitive and increasing demand for Canadian products. This may lead to an increase in exports and a boost to the Canadian economy. Revaluing the currency would have the opposite effect and make Canadian goods more expensive in foreign markets. Paying off the trade deficit and borrowing from the Exim bank may help strengthen the Canadian economy in the long run but will not necessarily lower the cost of goods in foreign markets. Selling more goods abroad is a good strategy, but devaluing the currency can make those goods more affordable and attractive to foreign buyers.

If Canada Wanted to Reduce the Cost of Its Goods