Question

If the demand for a country’s exports falls at the same time that tariffs on imports are raised, will the country’s currency tend to appreciate or depreciate in the long run?

Short answer

Whenever there is a fall in the demand of nation's product during the long-run time frame it will bring about deterioration of the nation's cash. Simultaneously, when the tax rates on imports of the nation builds it will prompt the enthusiasm for the nation's cash. Consequently, the absolute impact will be dubious.

Step-by-step solution

Concept Introduction 

Currency appreciation implies one needs to pay to a greater degree a homegrown money in return with unfamiliar cash and cash devaluation implies one needs to pay to a lesser extent a homegrown money in a trade of unfamiliar money to purchase labor and products.

Explanation

Whenever Import taxes are raised, imports decline, as individuals inside the nation request less unfamiliar products since it becomes costlier for merchants, therefore homegrown money appreciates.

On the opposite, when interest in the nation's products is diminished and outsiders' interest in the homegrown merchandise and resources decline, it devalues the homegrown cash.

In this way, over the long haul, the general impact on the swapping scale relies on which of the two impacts of the above is predominant.

Henceforth in the above case, climate money will appreciate or deteriorate can not be anticipated or is questionable.

Final Answer 

Whenever there is a fall in the demand of nation's product during the long-run time frame it will bring about deterioration of the nation's cash. Simultaneously, when the tax rates on imports of the nation builds it will prompt the enthusiasm for the nation's cash. Consequently, the absolute impact will be dubious.