A decrease in the relative export demand in a country will cause the demand for its currency to shift _____ and its currency to
A) left, appreciate.
B) left, depreciate.
C) right, appreciate.
D) right, depreciate.

Question

Quizplus · Accepted Answer

A decrease in the relative export demand for a country's goods will lead to a decrease in the demand for its currency, as fewer foreign buyers will need to exchange their money into the local currency to buy these goods. This shift in demand to the left will typically cause the currency to depreciate in value, as there is less demand for it on the foreign exchange market.

A Decrease in the Relative Export Demand in a Country