When a country's currency depreciates
A) foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are more expensive.
B) foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are cheaper.
C) foreigners find that its exports are cheaper; however, domestic residents are not affected.
D) foreigners are not affected, but domestic residents find that imports from abroad are more expensive.
E) foreigners find that its exports are cheaper and domestic residents find that imports from abroad are more expensive.

Question

Quizplus · Accepted Answer

When a country's currency depreciates, its goods become cheaper for foreigners, boosting exports. Conversely, foreign goods become more expensive for domestic residents, making imports costlier.

When a Country's Currency Depreciates