Question

It has been argued by economists that the depreciation of a home country's currency makes home goods cheaper for foreigners and foreign goods more expensive for domestic residents while the appreciation of a home country's currency makes home goods more expensive for foreigners and foreign goods cheaper for domestic residents. Briefly discuss three (3) determinants of imports and three (3) determinants of exports (Hint: each determinant should be a sub- heading and your discussion should be maximum 1 page)

Answer 1

The top 3 determinants of imports and exports shared below:

1. Economic situation - If the economy in expansionary phase the country will tend to export more while if economy is in contractionary phase then country shall tend to import more.
2. Forex Market- If the currency is depreciation mode then economy shall export more while if currency is in appreciation mode then imports will be higher.
3. Current Account Balance (CAB ) - if The CAB is low then economy shall export more while if CAB is HIgh then economy shall import more.