Question : When price of a foreign currency falls ______from that foreign country becomes cheaper and ________ increases.
 

Option 1: Imports, imports
 

Option 2: Exports, exports
 

Option 3: Imports, exports
 

Option 4: Exports, Imports
 

Question : What is the impact of a stronger domestic currency on a country's imports and exports?

Option 1: Increase in imports, decrease in exports
  

Option 2: Decrease in imports, increase in exports
   

Option 3: Increase in imports, increase in exports

Option 4: Decrease in imports, decrease in exports

Question : The foreign trade effect suggests that an increase in the price level:

Option 1: Increases imports and decreases exports
 

Option 2: Decreases imports and increases exports
 

Option 3: Increases both imports and exports

Option 4: Decreases both imports and exports

Question : Which of the following factors can cause a currency appreciation?

Option 1: Increase in imports
  

Option 2: Decrease in interest rates
    

Option 3: Political instability

Option 4: Trade deficit

Question : Which of the following are the effects of appreciation of domestic currency?
 

Option 1: Increase in imports 
 

Option 2: Decrease in exports 
 

Option 3: Decrease in national income
 

Option 4: All of the above.