Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It decreases purchasing power by making foreign goods cheaper
B
It increases purchasing power by making foreign goods more expensive
C
It increases purchasing power by making foreign goods cheaper
D
It has no effect on purchasing power
Understanding the Answer
Let's break down why this is correct
Answer
Currency appreciation means that a country's money becomes stronger compared to other currencies. When this happens, consumers can buy imported goods at lower prices because their money now exchanges for more foreign currency. For example, if a U. S. dollar appreciates against the euro, American consumers can buy European products more cheaply.
Detailed Explanation
When a country's currency gets stronger, it means you can buy more with it. Other options are incorrect because This answer suggests that stronger currency makes foreign goods cheaper, which is true, but it says purchasing power decreases; This option says that stronger currency makes foreign goods more expensive.
Key Concepts
consumer purchasing power
Topic
Impact of Currency Appreciation
Difficulty
easy level question
Cognitive Level
understand
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