Under Fixed Exchange Rates, Which One of the Following Statements

Multiple Choice

Under fixed exchange rates, which one of the following statements is the MOST accurate?

A) Devaluation causes a rise in output.
B) Devaluation causes a decrease in output.
C) Devaluation has no effect on output.
D) Devaluation causes a rise in output and a decrease in official reserves.
E) Devaluation causes a decrease in output and in official reserves.