What Is One Effect of a Weak Currency for the Domestic

question 5

Multiple Choice

What is one effect of a weak currency for the domestic economy?

• A)Consumers will purchase fewer foreign goods and more domestic goods.
• B)The price of domestically produced goods will increase and consumers will purchase more foreign goods.
• C)Foreign producers will flood the domestic market with goods.
• D)Overall trade will decline as consumers decrease both domestic and foreign purchases.

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Definitions:

GATT

The General Agreement on Tariffs and Trade, a legal agreement between countries to promote international trade by reducing or eliminating trade barriers such as tariffs and quotas.

FTAA

The Free Trade Area of the Americas, a proposed agreement to eliminate or reduce trade barriers among all countries in the Americas, excluding Cuba.

Knowledge

The facts, information, and skills acquired through experience or education; the theoretical or practical understanding of a subject.

Skills

The abilities and expertise a person has acquired through training or experience to perform certain tasks.