The Main Reason(s)why Governments Sometimes Chose to Devalue Their Currencies

question 79

Multiple Choice

The main reason(s) why governments sometimes chose 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:

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists among the variables being studied.

Null Hypothesis

The hypothesis that there is no significant difference or effect, serving as the default assumption to be tested against the alternative hypothesis.

Population Proportions

The ratio of members in a statistical population that have a particular attribute or characteristic.

Type I Error

A statistical error that occurs when a true null hypothesis is incorrectly rejected.