What effect does depreciation of the rand have on the South African current account in the balance of payments and domestic prices?

Question

Answer

A depreciation of the rand against the dollar improves the current account in the balance of payments and raises domestic prices.

Answer

A depreciation only increases domestic prices and does not affect the current account.

Answer

A depreciation of the rand against the dollar worsens the current account in the balance of payments and reduces domestic prices.

Answer

A higher exchange rate does not affect the current account in the balance of payments and domestic prices.

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