What happens when a nation's currency depreciates?
(A) Its products become cheaper to other nations.
(B) Its trade increases.
(C) Its trade decreases.
(D) Its products become more expensive to other nations.
Ans: (A) Its products become cheaper to other nations.
You might also like to view...
A tax on the wages that a firm pays its workers is called
a. an income tax. b. an excise tax. c. a consumption tax. d. a payroll tax.
Answer the following statement(s) true (T) or false (F)
1. Present-day fluctuations in exchange rates are determined solely by market forces. 2. When exchange rates change, they affect not only the currency market but the product markets as well. 3. Since the advent of flexible exchange rates, world trade has expanded. 4. The most important advantage of the Bretton Woods fixed-rate system is that it has reduced the speculative rampages that were common under a flexible-rate system. 5. Booming futures markets in foreign currencies opened in Chicago, New York, and in foreign financial centers during the years that the world used the Bretton Woods system.