In the transmission mechanism, an appreciation of the exchange rate leads to higher exports and lower imports which in turn lifts economic growth.

Name: In the transmission mechanism, an appreciation of the exchange rate leads to higher exports and lower imports which in turn lifts economic growth.
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An appreciation of the exchange rate makes a country's exports more expensive and imports cheaper, leading to lower exports and higher imports, which can reduce economic growth.

In the Transmission Mechanism, an Appreciation of the Exchange Rate