If a country's currency appreciates,all other things being equal,exports _____ and imports _____.

Question

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When a country's currency appreciates, it becomes relatively more expensive compared to other currencies. This makes exports from that country more expensive and less competitive on the global market. Therefore, exports decrease. On the other hand, imports become relatively cheaper, which makes them more attractive to domestic consumers. This leads to an increase in imports.

If a Country's Currency Appreciates,all Other Things Being Equal,exports _____