If a country's currency appreciates, all other things equal, exports _____ and imports _____.

Question

Quizplus · Accepted Answer

If a country's currency appreciates, meaning it increases in value compared to other currencies, its exports become more expensive for foreign buyers while its imports become cheaper for domestic consumers. This makes foreign buyers less likely to purchase exports, leading to a decrease in exports, while domestic consumers are more likely to buy cheaper imports, leading to an increase in imports.

If a Country's Currency Appreciates, All Other Things Equal, Exports