Devaluation of a currency refers to: MCQ with Answer and Explanation

Question
Devaluation of a currency refers to:
A. market-determined fall in the value of a currency
B. a rise in domestic interest rates
C. buying of foreign currency by the central bank
D. official lowering of the value of a currency under a fixed exchange rate system
Answer: Option D
Solution (By JKSSB Mock Tests)
Devaluation is the official lowering of a currency's value under a fixed exchange rate system.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
Which of the following is a characteristic of the 'Catch-up' or 'Convergence' hypothesis in growth theory?
A. Poorer economies tend to grow faster than richer ones, conditional on similar steady-state determinants
B. There is no tendency for convergence
C. Only absolute convergence always holds unconditionally
D. Richer economies always grow faster
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Correct Answer: Option A

Explanation:
Conditional convergence predicts that countries with lower initial income per worker grow faster once differences in saving rates, population growth and technology are controlled for.
This question belongs to: Economy GK Economy Set 1
Question #2
The Laffer curve shows the relationship between:
A. interest rate and investment
B. tax rate and tax revenue
C. inflation and unemployment
D. income and consumption
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Correct Answer: Option B

Explanation:
The Laffer curve shows the relationship between tax rates and total tax revenue.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' on port services is:
A. 28%
B. 5%
C. 18%
D. 12%
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Correct Answer: Option C

Explanation:
Port services attract 18% GST.
This question belongs to: Economy GK Economy Set 1
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