In the country of Losan, majority of the population is employed in the manufacturing sector. However, as the nation's overall income is low, little demand exists within Losan for the manufactured products. Yet, the government of Losan keeps its currency valuation quite low to ensure that:

A) Losanian goods are comparatively cheaper in the world market.
B) the currency can be abandoned easily for a higher value currency.
C) Losanian goods create more competition in the world market with their high prices.
D) limited number of manufacturing jobs are created in Losan.

Question

Sunny Yadav · Accepted Answer

Final Answer : A, Explanation :  Keeping the currency valuation low makes Losanian goods cheaper in the world market, which can increase their competitiveness and demand internationally, offsetting the low domestic demand.

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