Everything else held constant,if a factor decreases the demand for ________ goods relative to ________ goods,the domestic currency will depreciate.

Question

Quizplus · Accepted Answer

If a factor decreases the demand for domestic goods relative to foreign goods, it means that people are buying more foreign goods and less domestic goods. This increases the demand for foreign currencies (to buy those foreign goods) and decreases the demand for the domestic currency, leading to its depreciation.

Everything Else Held Constant,if a Factor Decreases the Demand for ________