Question

Which of the following statements is CORRECT? A stronger domestic currency stimulates exports by making exports...

Which of the following statements is CORRECT?

A stronger domestic currency stimulates exports by making exports cheaper

A weaker domestic currency hampers exports by making exports more expensive

A stronger domestic currency stimulates imports by making imports cheaper

None of the statements is correct

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution

Answer-A stronger domestic currency stimulates imports by making imports cheaper

When a domestic currency becomes stronger ,the amount of money paid in domestic currency is lesser as compared to earlier for the same good imported from the other country,thus the imports become cheaper ,thus stimulating imports.On the other hand in case of exports,since the other country which is importing the goods from domestic country will have to pay more ,thus the exports will become expensive ,thus stronger currency will hamper exports .The opposite happens in case of weake currency.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
It has been argued by economists that the depreciation of a home country's currency makes home...
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)
It has been argued by economists that the depreciation of a home country's currency makes home...
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)
Which of the following statements is correct? Group of answer choices a, An increase in exports...
Which of the following statements is correct? Group of answer choices a, An increase in exports will tend to increase, and an increase in imports will tend to decrease, the equilibrium GDP. b. An increase in exports and an increase in imports will both tend to increase the equilibrium GDP. c. An increase in exports and an increase in imports will both tend to decrease the equilibrium GDP. d. An increase in exports will tend to decrease, and an increase...
You are given the following information: Quantity of exports 600 Domestic currency price of exports 15...
You are given the following information: Quantity of exports 600 Domestic currency price of exports 15 Exchange rate (d/f) 1.25 i. Calculate the domestic and foreign currency currency values of exports. ii. What will happen if the exchange rate falls to 1.10, assuming that the value of the elasticity of demand for exports is -0.2? Provide your final answers to 2 decimal points.
Assume the following to be true in Turkey Exports contracts are denominated in foreign currency. Imports...
Assume the following to be true in Turkey Exports contracts are denominated in foreign currency. Imports contracts are denominated in foreign currency. What will happen to the domestic trade balance following a devaluation of domestic currency? Explain carefully the effects during the currency contract period. thank you :) (:
Question 1 The exchange rate is the: The opportunity cost at which goods are exchanged The...
Question 1 The exchange rate is the: The opportunity cost at which goods are exchanged The volume at which exports flow out of the country. Price of one currency in terms of another. All of the above. Flag this Question Question 2 Which of the following would create a demand for dollars? When foreign countries buy U.S. exports When the U.S. buys imports from other countries. When the U.S. citizens travel abroad. When U.S. imports are greater than exports. Flag...
Which of the following is likely to occur in the quantity adjustment phase of the J-Curve...
Which of the following is likely to occur in the quantity adjustment phase of the J-Curve adjustment path? Both imports and exports become relatively more expensive. Both imports and exports become relatively less expensive. The balance of trade gets worse. Imports become relatively more expensive, and exports become relatively less expensive. None of the above
2. Which of the following statements is (are) correct? (x) The increase in international trade in...
2. Which of the following statements is (are) correct? (x) The increase in international trade in the United States during the past 50 years is partly due to improvements in transportation, advances in telecommunications, and an increase in the trade of goods that have a high value per pound. (y) Over the last 50 years U.S. exports and imports have increased and U.S. imports as a percentage of GDP have more than doubled but U.S. exports as a percentage of...
Which of the following statements about the financing of international trade is correct? A.International trade means...
Which of the following statements about the financing of international trade is correct? A.International trade means the trading of financial assets for foreign exchange B.Most international transactions are made with gold. C.Imports are more important than exports to the economy of a nation. D.Exports provide the foreign currencies needed to pay for imports.
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can...
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can buy 120 yen per U.S. dollar, a. both the U.S. dollar and the yen have appreciated. b. both the U.S. dollar and the yen have depreciated. c. the U.S. dollar has appreciated and the yen has depreciated. d. the U.S. dollar has depreciated and the yen has appreciated. If the U.S. dollar appreciates in the foreign exchange market, a. American goods will become more...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT