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Which statement best explains Devaluation?

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Question ID #26438 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC Indian Economy Sectional Test 2026 Medium

Which statement best explains Devaluation?

Correct Answer: D. Official downward adjustment of currency value under a fixed or managed exchange-rate regime
Devaluation: Official downward adjustment of currency value under a fixed or managed exchange-rate regime

Question: Which statement best explains Devaluation?

A. Index measuring changes in retail prices of a basket of consumer goods and services

B. Central-bank policy influencing money, liquidity and interest rates to achieve macroeconomic objectives

C. Mechanism or rate historically used by RBI for absorbing liquidity from banks

D. Official downward adjustment of currency value under a fixed or managed exchange-rate regime

Correct Answer: D. Official downward adjustment of currency value under a fixed or managed exchange-rate regimeDevaluation: Official downward adjustment of currency value under a fixed or managed exchange-rate regime

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Which statement best explains Devaluation? - MCQ Explanation

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Correct answer: D. Official downward adjustment of currency value under a fixed or managed exchange-rate regime