Economics · International Trade
A currency devaluation in a fixed exchange rate system leads to which of the following effects?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Does not affect the balance of trade
- 2Makes exports cheaper and imports more expensive✓
- 3Reduces domestic price levels automatically
- 4Makes imports cheaper and exports more expensive
Correct answer
Makes exports cheaper and imports more expensive
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