When a country's currency depreciates against the currencies of major trading partners,
A)the country's exports tend to rise and imports fall.
B)the country's exports tend to fall and imports rise.
C)the country's exports tend to rise and imports rise.
D)the country's exports tend to fall and imports fall.

Question

Quizplus · Accepted Answer

When a country's currency depreciates, its exports become relatively cheaper for foreign buyers, which tends to increase demand for those exports, resulting in higher exports. Meanwhile, imports become more expensive for domestic buyers, leading to a decrease in demand and lower imports. Therefore, option A is the correct choice.

When a Country's Currency Depreciates Against the Currencies of Major