"A country is always worse off when its currency is weak (falls in value)." Is this statement true, false, or uncertain? Why?
A. False. A weaker currency makes domestically produced goods cheaper to foreign consumers, helping export industries. A weaker currency makes foreign produced goods more expensive to domestic consumers.
B. False. A weaker currency makes domestic producers and domestic consumers better off.
C. True. A weaker currency makes exports more expensive, hurting domestic producers in the global economy, and makes imports cheaper, making domestically produced goods less competitive.
D. Uncertain. A weaker currency makes goods produced abroad cheaper to domestic consumers. A weaker currency makes domestically produced goods more expensive to foreign consumers.