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Introduction to Financial Planning

Lowering in t...

Question

Lowering in the official value of a currency with respect to gold or foreign currency is called:

A

depreciation

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B

devaluation

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C

deflation

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D

denominator

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Solution

The correct option is B devaluation
A devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket.

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