Anonymous
Anonymous asked in Social ScienceEconomics · 2 months ago

All else equal, a currency depreciation in the home nation would cause what response?

A

Consumers in the home nation would find it more expensive to buy domestic goods compared to foreign goods, and the trade balance would decrease.

B

Consumers in the home nation would cut back on both domestic and foreign goods and the trade balance would decrease.

C

Consumers in the home nation would increase spending on both domestic and foreign goods, and the trade balance would be unchanged.

D

Consumers in the home nation would increase spending on domestic goods and decrease spending on foreign goods, causing the trade balance to increase.

1 Answer

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  • Oiy
    Lv 6
    2 months ago

    It would be D, import goods will be more expensive.

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