Answer:

The correct answer is option 'A' (revaluation).
Let's understand why this step is considered as revaluation of domestic currency.

Introduction:
When the government wants to reduce the prices of its domestic currency in terms of another currency, it takes certain measures to achieve this objective. One such measure is revaluation.

Explanation:
Revaluation refers to the increase in the value of a domestic currency in relation to another currency. In this case, the government plans to reduce the prices of the US Dollar from 50 to 45. So, the value of the domestic currency (let's say the currency is called "XYZ") would increase in relation to the US Dollar.

Effects of Revaluation:
Revaluation has several effects on the economy. Some of them are:
1. Increased value of domestic currency: Revaluation leads to an increase in the value of the domestic currency. In this case, the value of the XYZ currency increases in relation to the US Dollar.
2. Decreased prices of imports: As the value of the domestic currency increases, it becomes cheaper to import goods and services from countries that use the US Dollar. So, the prices of imports decrease.
3. Increased prices of exports: On the other hand, the prices of exports from the country become relatively more expensive for countries using the US Dollar. This may lead to a decrease in the demand for exports.
4. Reduced trade deficit: As the prices of imports decrease and the prices of exports increase, the trade deficit of the country may reduce. This is because the country is importing more at cheaper rates and exporting less at relatively higher rates.
5. Impact on tourism: Revaluation may also affect the tourism industry. If the domestic currency becomes stronger, it may discourage foreign tourists from visiting the country as their currency will have less purchasing power.

Conclusion:
In this scenario, the government's plan to reduce the prices of the US Dollar from 50 to 45 is considered as revaluation of the domestic currency. This would lead to an increase in the value of the domestic currency in relation to the US Dollar, and have various effects on the economy, such as cheaper imports and relatively more expensive exports.