In countries in which imports form a substantial part of household spending, major depreciations in the national currency can
A) produce significant declines in living standards.
B) increase consumption of foreign goods.
C) benefit workers at the expense of exporting firms.
D) hurt producers but benefit consumers.

Question

Quizplus · Accepted Answer

Major depreciations in the national currency can lead to higher prices for imported goods, which can reduce purchasing power and thereby decrease living standards.

In Countries in Which Imports Form a Substantial Part of Household