JAMB UTMEEconomicsInternational Trade2022

Devaluation makes exports:

ACheaperCORRECT
BMore expensive
CUnaffected
DBanned
AI
Toasta AI Explanation
Why the answer is A, and why the others tempt you.
**The reasoning** Devaluation means your country's currency loses value compared to foreign currencies. Let's say ₦1 = $1 before, but after devaluation ₦2 = $1. Imagine Nigeria exports a bag of rice that costs ₦1,000: - **Before devaluation**: The foreign buyer pays $1,000 (expensive!) - **After devaluation**: The same ₦1,000 bag now costs only $500 (cheaper!) The principle: **When your currency weakens, foreigners pay less in their own currency to buy your goods**. This makes your exports more attractive and competitive in the global market. **Why the wrong options tempt you** - **B (More expensive)**: You might confuse this with *imports*, which become more expensive after devaluation because you need more naira to buy foreign goods. - **C (Unaffected)**: Ignores that exchange rates directly impact international trade prices. - **D (Banned)**: Devaluation is a price mechanism, not a trade restriction. **Quick takeaway** Devaluation makes *your* goods cheaper for foreigners (boosting exports) but makes *foreign* goods expensive for you (discouraging imports) — remember: weak currency = strong exports!
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