In order to stimulate a stagnant economy, a government operating under a managed float may attempt to weaken its currency.

Question

Quizplus · Accepted Answer

If the government weakens its currency, it becomes cheaper for other countries to import goods from it, which in turn can increase demand for exports and thus stimulate the economy. This is one of the tools that can be used under a managed float system to try to boost economic growth.

In Order to Stimulate a Stagnant Economy, a Government Operating