What are two effects on trade when a nation’s currency decreases in value? #a A nation increases its exports because it is less expensive for other countries to buy goods from them.#b A nation decreases its exports because it is more expensive for other countries to buy goods from them. #c A nation increases its imports because it is less expensive to buy goods from other countries. #d A nation decreases its imports because it is more expensive to buy goods from other countries.

Answer: A and D

Explanation:

When a currency depreciates in value, the imports will cost more (since it takes more of the local currency to pay for it,) while for foreign buyers, local goods will cost less (since it'll cost less in a foreign currency,) which drives demand up. Therefore, A and D are the correct answers.

Option B is wrong as exports will be more expensive if the currency value increases, meaning it'll take more foreign money to exchange into a local currency to buy the same good.

Option C is wrong because an import is when a country buys goods from other countries, so it's more expensive, not less.

Therefore, Options A and D are correct.

Option A and Option D are correct. When a nation's currency decreases in value, it increases its exports and decreases its imports.

Option B is incorrect since if the value of the local currency goes down, it does not become more expensive for other countries to buy from them. Rather, it becomes cheaper for them. Similarly, Option C is also incorrect because it becomes more expensive to buy goods from other countries, not less expensive.

When the value of the local currency goes down, exports increase as the country needs to build up its foreign reserves and imports decrease as they are more expensive for the economy to bear. Thus, options A and D are correct.

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