Asked by Gurpreet Singh on Jul 26, 2024
Verified
A currency depreciation in the foreign exchange market will
A) encourage imports into the country whose currency has depreciated.
B) discourage imports into the country whose currency has depreciated.
C) discourage exports from the country whose currency has depreciated.
D) encourage foreign travel by the citizens of the country whose currency has depreciated.
Currency Depreciation
A decrease in the value of one currency relative to another currency in the foreign exchange market.
Foreign Exchange Market
A global trading space for the exchange of different countries' currencies.
Imports
Goods or services brought into one country from another for sale, often subject to tariffs, quotas, and trade agreements.
- Investigate how variations in exchange rates influence international trade balances.
- Acquire knowledge on the concepts of currency appreciation and depreciation.
Verified Answer
MC
morgan cancellarichJul 29, 2024
Final Answer :
B
Explanation :
When a country's currency depreciates, its goods and services become cheaper for foreigners, encouraging exports from the country. Conversely, foreign goods and services become more expensive for residents of the country whose currency has depreciated, discouraging imports into that country.
Learning Objectives
- Investigate how variations in exchange rates influence international trade balances.
- Acquire knowledge on the concepts of currency appreciation and depreciation.