Question

Why export is more profitable in currency depreciation?

Answer 1

$\huge\star{\underline{\underline\mid{\blue{\boxed{\tt{Answer}}}}}}\star$

_________________________________________

The trade deficit might worsen if the local currency appreciates because imports become cheaper and exports become less profitable, causing the domestic demand to fall. ... Small currency depreciation can help to reduce trade deficit because imports become more expensive and exports more attractive.

__________________________________________