________ occurs when there is a drop in a currency's value relative to other currencies or a fixed standard.
A) Exchange rate
B) Payment deficit
C) Imbalance of payments
D) Devaluation

Question

Quizplus · Accepted Answer

Devaluation occurs when a currency's value drops relative to other currencies or a fixed standard. This can be done intentionally by a country's government or it can happen naturally based on market forces. Devaluation can help export industries by making goods cheaper for foreign buyers, but it can also lead to inflation as imported goods become more expensive.

________ Occurs When There Is a Drop in a Currency's