Discussion :: Indian Economy
- Devaluation of currency leads to
|
A.
fall in domestic prices |
|
B.
increase in domestic prices |
|
C.
no impact on domestic prices |
|
D.
erratic fluctuations in domestic prices |
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Answer : Option B
Explanation :
Devaluation is the decision to reduce the value of a currency in a fixed exchange rate. A devaluation means that the value of the currency falls. Domestic residents will find imports and foreign travel more expensive. However domestic exports will benefit from their exports becoming cheaper.
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