Practicing Success
What will happen to the National income when in a country the market value of its currency appreciates, other things remaining constant? |
rise fall remain unaffected first rise and then fall |
fall |
The correct answer is option 2:fall When the market value of a country's currency appreciates, other things remaining constant, the following effects can occur on the national income:
Given these points, the likely effect of an appreciation in the currency, other things being equal, is a decrease in national income because the reduction in net exports would reduce overall economic activity. |