Which of the following would result from a depreciation in the exchange rate for a country’s currency?

Which of the following would result from a depreciation in the exchange rate for a country’s currency?

i. A fall in the foreign exchange price of that country’s exports.

ii. A rise in the foreign exchange price of that country’s imports.

iii. A rise in production costs for businesses using imported inputs.

iv. A worsening in that country’s terms of trade.

v. A fall in the domestic prices of that country’s imports.

vi. A rise in the domestic price of that country’s exports.
A . (i), (ii) and (iv) only
B . (i), (iii) and (iv) only
C . (ii), (v) and (vi) only
D . (iv), (v) and (vi) only

View Answer

Answer: B