Question 25
[Maximum number: 1]
A central bank officially lowers the price of its currency relative to an agreed rate in terms of other currencies.
What type of central bank policy is this?
A
appreciation
B
depreciation
C
devaluation
D
revaluation
CAIE A-Level Economics 11.2.3 Revaluation vs devaluation
Practise distinguishing revaluation and devaluation in fixed systems and predicting their immediate effects on prices and trade.
How this is tested
- distinguish devaluation and revaluation from depreciation and appreciation terms
- predict how devaluation changes import prices, terms of trade and deficit pressure