What typically happens to a country's balance of trade as the value of its currency falls?
A) It improves.
B) It declines.
C) It remains the same.
D) It fluctuates drastically.
E) It fluctuates moderately.

Question

Quizplus · Accepted Answer

When the value of a country's currency falls, its exports become cheaper for foreign buyers, potentially increasing demand for these exports. At the same time, imports become more expensive for domestic consumers, potentially reducing the demand for imported goods. This can lead to an improvement in the country's balance of trade.

What Typically Happens to a Country's Balance of Trade as the Value