Suppose an economy is an export based one where a US Multi National Corporation conducts business...

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Finance

Suppose an economy is an export based one where a US MultiNational Corporation conducts business with the economy, what arethe implications if the currency of the export based economydepreciates significantly against the dollar? What if thisdepreciation leads to a deficit on the current account, what arethe implications for the supply/demand in the foreign exchangemarket, holding all else constant?

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If the currency of the export based economy depreciates significantly against the dollar then the export based economy will start earning more money in terms of its home currency Thus the    See Answer
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Suppose an economy is an export based one where a US MultiNational Corporation conducts business with the economy, what arethe implications if the currency of the export based economydepreciates significantly against the dollar? What if thisdepreciation leads to a deficit on the current account, what arethe implications for the supply/demand in the foreign exchangemarket, holding all else constant?

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