The reduction in the value of a country's currency in relation to others is?

Assessment: WAEC SSCE - Commerce - 2015 (Objective) Subject: Commerce

Question 1 Report

The reduction in the value of a country's currency in  relation to others is?

Answer Details
Devaluation is the reduction in the value of a country's currency in relation to others. It means that the exchange rate of the country's currency has decreased compared to other currencies. This could happen due to a variety of reasons such as a decrease in demand for the country's exports, high inflation, or a decrease in the country's interest rates. Devaluation makes the country's exports cheaper and imports more expensive, which can help improve the country's balance of trade. However, it can also lead to higher inflation as the prices of imported goods increase.
Read lesson note on Trade (WAEC)
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