Question on: SS3 Economics - Methods of Correcting Deficit BOP
What is the potential drawback of currency devaluation as a method of correcting a deficit balance of payments?
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A
It can lead to inflation and higher costs for imported goods
B
It can lead to a decrease in foreign reserves
C
It can increase the country's foreign debt
D
It can lead to a decrease in domestic production
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Correct Option: A
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