Trusted by millions of Kenyans
LoginRegister
Study resources on Kenyaplex

Get ready-made curriculum aligned revision materials

Exam papers, notes, holiday assignments and topical questions – all aligned to the Kenyan curriculum.

Browse exam papers
Or go directly to:
Class notes Holiday assignments Topical questions Other resources

Outline three conditions for the success of devaluation policy

Outline three conditions for the success of devaluation policy

Answers

Simon
• Devaluation policy is not adopted by other countries
• Objectives of devaluation can be achieved only at that time when inflation pressure does not increase because costly imports can increase prices in the country. In this case, balance of payments cannot improve.
• The balance of payments position can be improved through devaluation, when the sum of elasticity of demand for exports at abroad and imports at home is greater than one. When the sums of elasticity of demand for country’s products at broad and imports in a country is more than one, the devaluation will prove fruitful to remove deficit in the balance of payments position.
skilled writter answered the question on May 1, 2018 at 16:27

Answer Attachments

Next: State three advantages and three disadvantages of open ended questions in a questionnaire.

Previous: Differentiate giving examples between human wants and needs

View more Economics Questions and Answers  |  Return to Questions Index

Exams With Marking Schemes

Related Questions