Question

9.Explain the effect of appreciation of domestic currency on exports​

Answer 1

Answer:

Domestic currency appreciates when there is a fall in foreign exchange rate. The domestic economy can now buy more quantity of goods and services from foreign countries for the less amount of domestic currency. As a result, export discourages and imports rises.

Answer 2

Answer:

Currency appreciation is an increase in the value of one currency in relation to another currency. Currencies appreciate against each other for a variety of reasons, including government policy, interest rates, trade balances and business cycles.

Domestic currency appreciates when there is a fall in foreign exchange rate. The domestic economy can now buy more quantity of goods and services from foreign countries for the less amount of domestic currency. As a result, export discourages and imports rises.

Explanation:

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