The percent by which import prices rise when the home currency depreciates by 1% is the degree of
A) pass-forward from exchange rates to import prices.
B) pass-through from exchange rates to import prices.
C) pass-on from exchange rates to import prices.
D) roll-forward from exchange rates to import prices.
E) pass-beyond from exchange rates to import prices.

Question

Quizplus · Accepted Answer

The degree of pass-through from exchange rates to import prices refers to the percent change in import prices resulting from a 1% change in the exchange rate. This reflects how much of the exchange rate change is passed through to consumers in the form of higher import prices. Pass-forward, pass-on, and pass-beyond are not commonly used terms in this context. Roll-forward is a term used in accounting and does not apply to the relationship between exchange rates and import prices.

The Percent by Which Import Prices Rise When the Home