The Main Reason(s) Why Governments Sometimes Choose to Devalue Their

question 58

Multiple Choice

The main reason(s) why governments sometimes choose to devalue their currencies is (are)

• A) devaluation makes domestic goods more expensive in relation to foreign goods.
• B) devaluation makes domestic services more expensive in relation to foreign services.
• C) devaluation increases foreign reserves held by the central bank.
• D) devaluation improves the current account and increases foreign reserves held by the central bank.
• E) devaluation hurts foreign currencies.

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Definitions:

Penny-Pinching Techniques

Strategies and methods focused on reducing expenses and conserving financial resources in a cost-effective manner.

Earned Income

The revenue generated by a nonprofit organization through the sale of goods and services, as opposed to funding received through donations or grants.

Sensitivity Analysis

A financial modeling technique used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Sponsorship Relationship

Describes the formal alliance between an entity, typically a corporation, and another party, often in events, nonprofits, or sports, where each provides mutual benefits to the other.