Question : The domestic country will have to spend less domestic currency to import foreign goods. Which effect of depreciation is highlighted here?
Option 1: Increase in imports
Option 2: Decrease in exports
Option 3: Increase in the national income
Option 4: All of the above.
Answer (1)
27th Jan, 2024
Correct Answer:
Decrease in exports
Solution :
Appreciation of a domestic currency means a rise in the price of domestic currency in terms of foreign currency, where less amount of money has to be spend to import goods.
Hence Option B is correct.
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