14
RCMultiple Choice

Economic Development — Cumulative exam

Question 14 • ISP ONLY: Economics S5000XX

Why might a country choose to devalue its currency?

Answer
A
to please its trading partners
B
to encourage exports
C
to encourage imports
D
to reduce taxes

Explanation

Devaluing a currency makes the country's goods and services less expensive for buyers using foreign currencies. This can make exports more attractive and encourage foreign customers to buy more of them. It generally makes imports more expensive, so encouraging imports is not the usual goal.

AI-written and checked against the verified answer.

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