Complete currency pass-through arises when a 10 percent depreciation in the value of the dollar causes U.S.________prices to __________.
A) import, fall by 10 percent
B) import, rise by 10 percent
C) export, rise by 10 percent
D) export, rise by 20 percent

Question

Quizplus · Accepted Answer

Complete currency pass-through refers to the complete translation of the exchange rate fluctuations to the prices of imported goods. Therefore, a 10% depreciation in the dollar's value would cause import prices to rise by 10%.

Complete Currency Pass-Through Arises When a 10 Percent Depreciation in the Value