How does devaluation affect a country’s exports and imports? What wil

QUESTION

How does devaluation affect a country’s exports and imports?

What will be an ideal response?

ANSWER

Answer: When a country devalues its currency, the price of its exports decreases and the price of imports increase.
Explanation: Devaluation lowers the value of a currency relative to the currency of other countries. This makes the country’s exported goods cheaper on the world market and makes goods from other countries imported into the country more expensive.