Increased demand for a nation's products will tend to make its currency stronger while driving down the price of foreign goods.

Question

Quizplus · Accepted Answer

When a nation's products are in high demand, it creates a greater demand for the nation's currency to purchase those products. This increased demand for the currency causes it to appreciate in value, making it stronger. At the same time, the higher demand for domestic products reduces the demand for foreign goods, which can lead to a decrease in their prices.

Increased Demand for a Nation's Products Will Tend to Make