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JAMB Commerce 1994 Question 24

Question 24

Foreign Trade

One of the effects of the devaluation of the Naira is that the

  1. A.goods that can be imported with the naira have become cheaper
  2. B.value of other currencies relative to the naira have become cheaper
  3. C.goods that can be exported from Nigeria have become costlier
  4. D.imports that can be bought with the naira have become costlier.
Show the answer and explanation

Answer: D (imports that can be bought with the naira have become costlier.)

Explanation

Devaluation lowers the naira's value, so more naira are needed to buy foreign goods: imports become dearer and exports cheaper.