Question

When the foreign exchange rate in a country is on the rise what impact is
this likely to have on export and import? Explain how.​

Answer 1

Answer:

For example, if the exchange rate for $1 = Rs 50 increases to $1 = Rs 56, then the import of goods to foreign countries will become costlier. So, the goods worth Rs 56 for $1 can be imported, and hence, there is a decline in the demand for imports.