Question

When a nation's currency appreciates, its products become _________ to other countries, which ultimately _________ that nation's exports. On top of that, foreign goods are __________ within that nation, which ultimately _________ that nation's imports.

Answer 1

the answers are more expensive, decreases, less expensive and increases

Answer 2

When a nation's currency appreciates, its products become more expensive to other countries, which ultimately decreases that nation's exports. On top of that, foreign goods are cheaper within that nation, which ultimately increases that nation's imports.

Step-by-step explanation:

The exchange rate affects foreign trade, so that when the exchange rate of a country falls, the prices of imported goods rise, while exports become cheaper for foreigners. As a result, the country is more competitive in world markets and net exports increase.

On the contrary, when the exchange rate rises, imported products become cheaper but exports decrease, as these products are more expensive for foreign countries.