Economics 2281 · O Level · Foreign exchange rates

Foreign exchange rates — practice question

How would lowering the international value of an economy’s currency help to reduce unemployment?

  • ADevaluing the currency would increase the cost of production.
  • BDevaluing the currency would increase the confidence of investors.
  • CDevaluing the currency would increase the foreign demand for domestic products.
  • DDevaluing the currency would increase the demand for imports.

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