Solved: Devaluation of a currency is used to achieve which of the following a. an

Chapter 0, Problem 4

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QUESTION:

Devaluation of a currency is used to achieve which of the following? a. an elimination of a surplus in the foreign exchange market b. an elimination of a shortage in the foreign exchange market c. a reduction in aggregate demand d. a lower inflation rate e. a floating exchange rate

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QUESTION:

Devaluation of a currency is used to achieve which of the following? a. an elimination of a surplus in the foreign exchange market b. an elimination of a shortage in the foreign exchange market c. a reduction in aggregate demand d. a lower inflation rate e. a floating exchange rate

ANSWER:

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Devaluation of currency is associated with decreasing the currency's value while following the fixed exchange rate system by increasing the supply of domestic currency in the global market.

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