Asked by Jillian Peace on May 26, 2024
Verified
When Country A's currency strengthens against Country B's, citizens of Country A will
A) pay less to buy Country B's products.
B) pay more to buy Country B's products.
C) pay more to buy domestically-produced products.
D) not be affected by the change in their currency's value.
Currency Strengthens
Occurs when the value of a currency rises in comparison to one or more foreign currencies, increasing purchasing power abroad.
Domestically-Produced Products
Goods that are manufactured or cultivated within a country's borders, as opposed to being imported.
- Gain an understanding of the mechanics behind currency exchange and its influence on international investment dynamics.
Verified Answer
VR
Victoria ReddyMay 26, 2024
Final Answer :
A
Explanation :
When Country A's currency strengthens against Country B's, it means that it can buy more of Country B's currency with its own currency. This results in the prices of Country B's products becoming cheaper for citizens of Country A, as they require less of their own currency to purchase the same amount of Country B's currency needed for the purchase. Therefore, citizens of Country A will pay less to buy Country B's products.
Learning Objectives
- Gain an understanding of the mechanics behind currency exchange and its influence on international investment dynamics.