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dillon_green23 dillon_green23
wrote...
Posts: 492
4 years ago
Explain what is meant by a devaluation of a currency. Under what circumstances would a country devalue its currency?
Textbook 
Macroeconomics: Principles, Applications and Tools

Macroeconomics: Principles, Applications and Tools


Edition: 7th
Authors:
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wrote...
4 years ago
In a fixed exchange rate system, a country faces a balance of payments deficit when the supply of its currency exceeds the demand at the fixed exchange rate. The country can lower the value at which the currency is pegged to increase its net exports; this is called a devaluation.
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