what is the general effect of dollar depreciation on exports and imports?

Answer 1

It is simple supply and demand. A weaker dollar increases foreigners demand for our goods and services. Many argue, with good reason, that this is behind the recent records in our stock markets. Another side effect of the weaker dollar is that jobs are created to handle the production for this increase in demand.

There are negative impacts on US consumers who purchase imports and travel abroad. In the big picture. Asia and Europe are especially important in this equation. "A higher dollar makes it more difficult for U.S. consumers to afford products imported from those regions, which rely heavily on exports as engines of economic growth. A weak currency typically leads to inflation, because it prompts companies that export to the U.S. to raise prices."

Check out this story from Business Week, they can explain it much easier...

Answer 2

Depreciation is not an absolute; it is always relative to something. Dollar now vs. dollar a year ago has no meaning on imports/exports. Dollar vs. foreign currency is a different story. A weaker dollar makes it cheaper for foreigners to buy our stuff and increases exports. A strong dollar works exactly the other way and increases imports.