The Student Room Group


does this make sense? so when inflation is high, value of currency decreases so exchange rates fall, so exports become cheaper and firms are more competitive in international markets? My textbook is saying that high inflation reduces international competitiveness and I am confused as to how?
(edited 1 year ago)
High inflation rate will make exports less competitive as they are expensive (to the countries that the exports are going to) and imports from abroad seem cheaper. This will reduce demand for exports and increase demand for imports

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