Over time, a depreciation in the value of a nation's currency in the foreign exchange market will result in
A) exports rising and imports falling.
B) imports rising and exports falling.
C) both imports and exports rising.
D) both imports and exports falling.

Question

Quizplus · Accepted Answer

When a nation's currency depreciates, its goods and services become cheaper for foreign buyers, leading to an increase in exports. Conversely, foreign goods and services become more expensive for domestic consumers, resulting in a decrease in imports.

Over Time, a Depreciation in the Value of a Nation's