Question : Which of the following are the effects of Depreciation of domestic currency?
Option 1: Increase in exports
Option 2: Decrease in imports
Option 3: Increase in national income
Option 4: All of the above.
Correct Answer: All of the above.
Solution : Increase in exports, decrease in imports and increase in national income and the effect of depreciation of domestic currency. Hence option D is correct.
Question : Which of the following are the effects of appreciation of domestic currency?
Question : The domestic country will have to spend less domestic currency to import foreign goods. Which effect of depreciation is highlighted here?
Question : The domestic country will have to spend more domestic currency to import foreign goods. Which effect of depreciation is highlighted here?
Question : What is the impact of a stronger domestic currency on a country's imports and exports?
Question : Net exports will decrease. Which effect of depreciation is highlighted here?
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