Assume that an economy is operating at less than its full-employment level of output.Which event would most likely increase an economy's exports?
A)a rise in the tariff on products imported from abroad
B)a fall in the prosperity of trading partners for this economy
C)an appreciation of a nation's currency relative to foreign currencies
D)a depreciation of a nation's currency relative to foreign currencies

Question

Quizplus · Accepted Answer

If an economy is operating below full employment, it means there is spare capacity, which can be utilized to increase production for export purposes. A depreciation of the currency would make exports cheaper, more competitive in foreign markets, and increase demand for those exports, resulting in an increase in exports.

Assume That an Economy Is Operating at Less Than Its