Currency devaluation can boost a country's exports, but currency revaluation can increase foreign competition.

Question

Quizplus · Accepted Answer

Currency devaluation reduces the value of a country's currency, making their exports cheaper for foreign buyers and thus increasing demand for their products. On the other hand, currency revaluation increases the value of a country's currency, making their exports more expensive and potentially decreasing demand for their products. This also makes foreign products cheaper for domestic buyers, which can increase competition for local businesses.

Currency Devaluation Can Boost a Country's Exports, but Currency Revaluation