An appreciation of the domestic currency means that the currency has increased in value relative to other currencies. This typically leads to the following implication:
- Lowers the domestic price of imported goods.
When the domestic currency appreciates, it takes fewer units of the domestic currency to purchase the same amount of foreign goods. As a result, imported goods become cheaper for consumers in the domestic market.
Therefore, the correct statement is that an appreciation of the domestic currency lowers the domestic price of imported goods.