The increase of disposable income in a country typically leads to appreciation of the country's currency relative to other currencies.

Question

Quizplus · Accepted Answer

An increase in disposable income can lead to higher spending on both domestic and imported goods. If the increase in spending on imports is significant, it can lead to a deterioration of the trade balance, potentially causing the country's currency to depreciate rather than appreciate, as more of the currency is exchanged for foreign currencies to pay for imports.

The Increase of Disposable Income in a Country Typically Leads