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13 October, 12:28

What happens when a nation's currency depreciates?

a. its products become more expensive to other nations.

b. its trade increases.

c. its products become cheaper to other nations.

d. its trade decreases?

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  1. 13 October, 12:37
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    I believe the answer is C products become cheaper to other nation

    When a nation's currency depreciates, the value of depreciated currency will be reduced compared to other's nations.

    So if USA's currency depreciates and before the depreciation other country need to spend 10 Euro to obtain 10 products from our country, after the depreciation other country could obtain 11 products with the same 10 Euro.
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