Changes in the Foreign Exchange Market and Net Exports

Multiple Choice

If a country's currency appreciates, what is the likely effect on its net exports?

• Remain unchanged
• Fluctuate
• Increase
• Decrease

Multiple Choice

When a currency appreciates, what happens to the demand for imports?

• Demand for imports increases
• Demand for imports becomes unpredictable
• Demand for imports remains the same
• Demand for imports decreases

Multiple Choice

What is one effect of currency appreciation on net exports?

• Net Exports Increase

• Net Exports Remain unchanged

• Net Exports Fluctuate

• Net Exports Decrease