All else equal, a higher rate of inflation in the foreign country makes foreign goods cheaper in the domestic country.

Name: All else equal, a higher rate of inflation in the foreign country makes foreign goods cheaper in the domestic country.
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Question

Quizplus · Accepted Answer

A higher rate of inflation in the foreign country typically makes foreign goods more expensive in the domestic country, as the foreign currency depreciates relative to the domestic currency, increasing the price of imported goods.

All Else Equal, a Higher Rate of Inflation in the Foreign