In terms of exchange rates, what does revaluation imply?

Revaluation refers to the official increase in the value of a country's currency in relation to other currencies, particularly within a fixed exchange rate system. This process is typically implemented by a country's government or central bank when they decide to strengthen their currency deliberately.

In fixed exchange rate systems, where the currency's value is pegged to another major currency or a basket of currencies, revaluation means that the pegged value is adjusted upwards. This leads to an increase in the purchasing power of the currency relative to foreign currencies. It allows the country to import goods at a lower cost and can help manage inflation by reducing the prices of imported goods.

In contrast, floating exchange systems allow currencies to fluctuate based on market demands, and while currency value can increase, these movements are not typically termed revaluation but rather appreciation.

Thus, the implications of revaluation are distinctly related to fixed exchange rate systems and denote an increase in the nominal value of the currency, thereby confirming the correctness of the chosen answer.