A decrease in the dollar price of foreign currency would cause
A) the nation's imports to increase and exports to decline.
B) the nation's exports to increase and imports to decline.
C) both imports and exports to decline.
D) both imports and exports to rise.

Question

Quizplus · Accepted Answer

When the dollar price of foreign currency decreases, foreign goods become cheaper for domestic consumers, leading to an increase in imports. Conversely, domestic goods become more expensive for foreign consumers, leading to a decline in exports.

A Decrease in the Dollar Price of Foreign Currency Would