After a Devaluation,all Other Things Being Equal,a Country's Balance of Payments

question 364

Multiple Choice

After a devaluation,all other things being equal,a country's balance of payments on the current account will likely:

• A) increase.
• B) decrease.
• C) remain the same.
• D) fluctuate randomly.

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Definitions:

Utility

In economics, utility refers to the satisfaction or pleasure derived by consumers from consuming goods or services.

Efficient

An attribute of a market or process where resources are allocated in the most effective way, yielding the maximum benefit for a given set of resources.

Competitive Equilibrium

Competitive Equilibrium is a state where supply equals demand, market resources are efficiently allocated, and no participant in the market can influence the price of goods or services.

Price Adjustment

The process by which prices of goods and services are altered to respond to changes in the market conditions.