In reality, if a nation devalues its currency, then the final result will be that:
A)net exports and GDP will increase.
B)net exports and GDP will decrease.
C)there will be is no long term effect on net exports and GDP.
D)there will be a decrease in imports and an increase in GDP.

Question

Quizplus · Accepted Answer

When a nation devalues its currency, its exports become cheaper and more competitive in the global market. This results in an increase in net exports, as more countries buy the cheaper exports. As exports increase, the GDP of the country also increases, as there is more economic activity. Therefore, the correct answer is A.

In Reality, If a Nation Devalues Its Currency, Then the Final