A depreciation of a nation's currency shifts:
A)down its supply curve of imports in terms of the foreign currency
B)up its demand curve of imports in terms of the foreign currency
C)down its demand curve of imports in terms of the foreign currency
D)down its demand curve of imports in terms of the domestic currency

Question

Quizplus · Accepted Answer

When a nation's currency depreciates, it becomes less valuable compared to other currencies, making imports more expensive in terms of domestic currency. As a result, consumers and businesses might reduce their demand for imports, causing a shift down the demand curve of imports in terms of the foreign currency. Therefore, choice C is the best answer.

A Depreciation of a Nation's Currency Shifts