Currency devaluation and revaluation primarily affect the economy's current account and have secondary effects on domestic employment and inflation.

Question

Quizplus · Accepted Answer

Currency devaluation and revaluation affect the trade balance, which is a component of the current account. Changes in the current account can have secondary effects on measures such as employment and inflation in the domestic economy.

Currency Devaluation and Revaluation Primarily Affect the Economy's Current Account