Question

question
a currency appreciation does which of the following?
answer
○ makes products exported from the domestic country more expensive for foreigners
○ makes imported goods more costly for domestic consumers
○ makes the domestic country’s export levels increase
○ makes products exported from the domestic country less expensive for foreigners
○ i dont know yet
submit

Explanation:

To solve this, we analyze currency appreciation:

• Option 1: When a currency appreciates, domestic exports become more expensive for foreigners (since their currency buys less of the domestic currency), so this is correct.
• Option 2: Appreciation makes imported goods cheaper (domestic currency buys more foreign currency), but this is not the focus here.
• Option 3: Exports decrease (not increase) because they are pricier for foreigners.
• Option 4: Exports become more (not less) expensive for foreigners.

Answer:

The correct option is: "Makes products exported from the domestic country more expensive for foreigners" (the first option in the list).