When a country's currency depreciates:

Question

Quizplus · Accepted Answer

When a country's currency depreciates, its goods become cheaper for foreigners to purchase. This leads to an increase in demand for the country's goods and can ultimately increase exports. As a result, choice B is incorrect. Additionally, a depreciation in currency typically leads to inflation which can reduce the country's purchasing power leading to a decrease in imports. Therefore, choice C is also incorrect. While foreign goods may become more expensive for the country due to inflation, they do not become cheaper in the global context. Hence, choice D is incorrect.

When a Country's Currency Depreciates