1
Question
What is the term used for a deliberate downward adjustment to the value of a country's currency, relative to another currency, group of currencies or standard?
What is the term used for a deliberate downward adjustment to the value of a country's currency, relative to another currency, group of currencies or standard?
Open in App
Solution
The correct option is A Devaluation
Devaluation is the planned or market force reduction in the value of a currency's exchange value. It may improve the country's balance of payments situation by enhancing exports and reducing imports, however, it aggravates inflation for imported goods or those having significant import content. Thus, devaluation is the deliberate downward adjustment of a country's currency value. It is the decision of the government of a country to opt this method in order to help reduce trade deficit.
Devaluation is the planned or market force reduction in the value of a currency's exchange value. It may improve the country's balance of payments situation by enhancing exports and reducing imports, however, it aggravates inflation for imported goods or those having significant import content. Thus, devaluation is the deliberate downward adjustment of a country's currency value. It is the decision of the government of a country to opt this method in order to help reduce trade deficit.
Suggest Corrections
0
Similar questions
View More
Join BYJU'S Learning Program
Explore more
Join BYJU'S Learning Program
