Giving reasons, state whether the following statements are true or false:
Appreciation of domestic currency discourages imports.
Appreciation of domestic currency discourages imports.
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False. Explantion:
Appreciation of domestic currency encourages imports and does not discourage them. Because appreciation of domestic currency makes imports cheaper, so their demand will rise. Thus, it encourages imports and does not discourage them.
Appreciation of domestic currency encourages imports and does not discourage them. Because appreciation of domestic currency makes imports cheaper, so their demand will rise. Thus, it encourages imports and does not discourage them.
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