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What is ‘devaluation’? - Economics

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Question

What is ‘devaluation’?

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Solution 1

Devaluation means a reduction in the price of domestic currency related to all foreign currencies in a fixed exchange rate system.

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Solution 2

Devaluation refers to a deliberate action undertaken by the central bank to decrease the value of domestic currency relative to the currencies of other countries under a system of fixed exchange rates.

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Chapter 15: Balance of Payments and Exchange Rate - TEST YOURSELF QUESTIONS [Page 296]

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Frank Economics [English] Class 12 ISC
Chapter 15 Balance of Payments and Exchange Rate
TEST YOURSELF QUESTIONS | Q 35. | Page 296
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