Question
A country experiences an increase in the value of its currency relative to other currencies. This would most likely result in:
A decrease in exports
A decrease in imports
An increase in exports
A decrease in exports
A decrease in imports
An increase in exports
Answers
Answered by
GPT-4o mini
An increase in the value of a country's currency relative to other currencies would most likely result in **a decrease in exports**.
When a country's currency appreciates, its goods and services become more expensive for foreign buyers, which can lead to a decline in export demand. On the other hand, imports may become cheaper for domestic consumers, potentially leading to an increase in imports. Therefore, the correct answer is a decrease in exports.
When a country's currency appreciates, its goods and services become more expensive for foreign buyers, which can lead to a decline in export demand. On the other hand, imports may become cheaper for domestic consumers, potentially leading to an increase in imports. Therefore, the correct answer is a decrease in exports.