Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It increases imports, attracts foreign investment, and promotes economic growth.
B
It decreases imports, repels foreign investment, and hinders economic growth.
C
It has no effect on imports or foreign investment, but hinders economic growth.
D
It decreases imports, attracts foreign investment, and promotes economic growth.
Understanding the Answer
Let's break down why this is correct
Answer
When a country's currency appreciates, it means that its money is worth more compared to other currencies. This makes imported goods cheaper for consumers and businesses, which can lead to an increase in imports. For example, if the U. S. dollar strengthens against the euro, American shoppers might buy more European cars because they are now less expensive.
Detailed Explanation
When a country's currency gets stronger, it can buy more goods from other countries. Other options are incorrect because Some might think a stronger currency makes imports less appealing; It's a common belief that currency strength has no effect.
Key Concepts
import dynamics
economic growth
foreign investment
Topic
Impact of Currency Appreciation
Difficulty
hard level question
Cognitive Level
understand
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