If country A's currency strengthens against country B's currency, what will be the most likely effect...
If country A's currency strengthens against country B's currency, what will be the most likely effect on trade between the country A and B?
Country A will import less from country B.
Country A will import more from country B.
Country B will export less to country A.
Country B will import more from country A.
Homework Answers
Option B is correct
Country A will import more from country B.
If Country B's currency depreciates then goods from Country B will have effectively lower cost for firms in Country A, so Country A will import more goods from Country B.
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