An increase in the quantity of goods and services imported that results in a local business facing greater competition could be the result of:YOUR ANSWERYour Answera depreciation of the exchange rate.government placing a tariff on imported goods.a downturn in the global economy.an appreciation of the exchange rate.
Question
An increase in the quantity of goods and services imported that results in a local business facing greater competition could be the result of:YOUR ANSWERYour Answera depreciation of the exchange rate.government placing a tariff on imported goods.a downturn in the global economy.an appreciation of the exchange rate.
Solution
An increase in the quantity of goods and services imported that results in a local business facing greater competition could be the result of an appreciation of the exchange rate.
Here's why:
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When the exchange rate appreciates, it means that the local currency is gaining strength compared to other currencies.
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This means that it takes less of the local currency to buy goods and services from other countries.
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As a result, imports become cheaper, which can lead to an increase in the quantity of goods and services imported.
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This increase in imports can lead to greater competition for local businesses, as they now have to compete with cheaper foreign goods and services.
So, an appreciation of the exchange rate can lead to an increase in imports and greater competition for local businesses.
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