If a nation's currency depreciates, this will tend to
A) shift a nation's balance of trade toward a deficit.
B) cause a deficit in the government's budget (expenditures − revenues).
C) make foreign goods more expensive for the nation's citizens.
D) make foreign goods cheaper for the nation's citizens.

Question

Quizplus · Accepted Answer

When a nation's currency depreciates, it means that the currency has lost value compared to other currencies. This makes foreign goods more expensive for the nation's citizens because they now need more of their own currency to buy the same amount of foreign goods.

If a Nation's Currency Depreciates, This Will Tend to