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WAEC Commerce 2009 Question 14

Question 14

Foreign Trade

If a country devalues its currency, there would be

  1. A.reduction in imports
  2. B.reduction in exports
  3. C.increase in production locally
  4. D.increase in standard of living
Show the answer and explanation

Answer: A (reduction in imports)

Explanation

Devaluation makes imports dearer, so a country buys fewer imports.