When a Country's Currency Depreciates

question 49

Multiple Choice

When a country's currency depreciates

• A) foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are more expensive.
• B) foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are cheaper.
• C) foreigners find that its exports are cheaper; however, domestic residents are not affected.
• D) foreigners are not affected, but domestic residents find that imports from abroad are more expensive.
• E) foreigners find that its exports are cheaper and domestic residents find that imports from abroad are more expensive.

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Definitions:

Salient Aspect

A feature or characteristic that stands out prominently and is often the focus of attention or consideration.

Kelley's Covariation Model

a psychological theory that explains how individuals attribute cause to behavior based on the consistency, distinctiveness, and consensus of the observed action.

Consensus

General agreement among a group of people or within a community.

Consistency

The principle of maintaining uniformity or stability in one's beliefs, attitudes, and behaviors over time or across situations.