Asked by Aleksandar Kalenic on May 10, 2024
Verified
If the currency of your country is appreciating, the result should be to ______ exports and to _______ imports.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) not affect; not affect
Appreciating
The increase in the value of an asset over time, which can occur due to various factors such as inflation, changes in interest rates, or increased demand.
Exports
Products or services that are shipped from one country to another for the purpose of sale or exchange.
Imports
Goods or services brought into a country from abroad for sale.
- Understand the effect of currency valuation fluctuations on export and import activities.
Verified Answer
JW
James WhiteleyMay 15, 2024
Final Answer :
C
Explanation :
When a country's currency appreciates, its exports become more expensive for foreign buyers, leading to a decrease in exports. Conversely, foreign goods become cheaper for domestic consumers, leading to an increase in imports.
Learning Objectives
- Understand the effect of currency valuation fluctuations on export and import activities.