Which one of the following statements is the MOST accurate?
A) A depreciation of a country's currency makes its goods cheaper for foreigners.
B) A depreciation of a country's currency makes its goods more expensive for foreigners.
C) A depreciation of a country's currency makes its goods cheaper for its own residents.
D) A depreciation of a country's currency makes its goods cheaper.
E) An appreciation of a country's currency makes its goods more expensive.

Question

Quizplus · Accepted Answer

When a country's currency depreciates, its goods become relatively cheaper for foreigners because they can buy more of the country's goods with the same amount of their own currency. This can lead to an increase in exports, as foreign buyers are attracted by the lower prices.

Which One of the Following Statements Is the MOST Accurate