Economics Exchange Rate Systems Questions
Exchange rates have a significant impact on international tourism expenditure. When a country's currency depreciates or becomes weaker relative to other currencies, it becomes cheaper for foreign tourists to visit that country. This leads to an increase in international tourism expenditure as more tourists are attracted to the destination due to the lower cost of travel, accommodation, and other expenses. On the other hand, when a country's currency appreciates or becomes stronger, it becomes more expensive for foreign tourists to visit, resulting in a decrease in international tourism expenditure. Therefore, exchange rates play a crucial role in determining the affordability and attractiveness of a destination for international tourists.