Changes in a nation's exchange rates have an impact on:

Question

Quizplus · Accepted Answer

Changes in exchange rates affect the relative prices of home and foreign goods. For example, if a country's currency depreciates, its exports become cheaper for foreigners and their imports become more expensive for domestic consumers, leading to an increase in demand for domestic products and a decrease in demand for foreign products. This can impact a country's trade balance and overall economic situation. The other choices are not directly impacted by changes in exchange rates.

Changes in a Nation's Exchange Rates Have an Impact On