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Module 1: Economic activity

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The Exchange Rate

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Economics - Economic Activity - Demand Factors - The Exchange Rate

The Exchange Rate

If the exchange rate depreciates, exports become relatively cheaper,
contributing to greater export revenue. At the same time, imports are more
expensive. The demand for exports should go up and the demand for imports
should go down, although the exact impact will depend on the elasticity of
supply for exports and the elasticity of demand for imports.

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