Question : It means with same amount of dollar more goods can be purchased from foreign country. Which effect of appreciation is highlighted here?
Option 1: Increase in imports
Option 2: Decrease in exports
Option 3: Decrease in the national income
Option 4: All of the above.
Answer (1)
12th Jan, 2024
Correct Answer:
Increase in imports
Solution :
Appreciation of a domestic currency means a rise in the price of domestic currency in terms of foreign currency, where more amount of good can be purchase from foreign currency with same amount of money.
Hence Option A is correct.
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