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
Answer: Option B
Solution (By Examveda Team)
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.Related Questions on Indian Economy
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