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What are two effects on trade when a nation's currency decreases in value?

A. A nation increases its exports because it is less expensive for other countries to buy goods from them.

B. A nation decreases its exports because it is more expensive for other countries to buy goods from them.

C. A nation increases its imports because it is less expensive to buy goods from other countries.

D. A nation decreases its imports because it is more expensive to buy goods from other countries.

Question

Social Studies

Naveen

Today, 09:52

BRAINliest hel!

What are two effects on trade when a nation's currency decreases in value?

A. A nation increases its exports because it is less expensive for other countries to buy goods from them.

B. A nation decreases its exports because it is more expensive for other countries to buy goods from them.

C. A nation increases its imports because it is less expensive to buy goods from other countries.

D. A nation decreases its imports because it is more expensive to buy goods from other countries.

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Answers (1)

Know the Answer?

Wilson Dunlap · Answer 1

Hello, Your answer will be D ...

Explanation:

When the local currency depreciates, imports become more expensive, so locals often buy fewer imported goods. On the other hand, exported goods cost less to international buyers, so their demand tends to grow. Fewer imports and more exports will reduce the trade deficit and could lead to a surplus. First, depreciation (Devaluation) of currency increases the volume of exports and reduces the volume of imports, both of which have a favorable effect on the balance of trade, that is, they will lower the trade deficit or increase the trade surplus.