Effect of depreciation in indirect exchange rate?

[archived_user]

I am confused on the relationship of indirect exchange rate and AD.
Wiley states that: decrease (depreciation) in indirect exchange rate (FC/DC) results in higher exports, lower imports, and higher AD.
BUT, if I use a numerical example, where USD is the domestic currency:
Indirect Exchange Rate (FC/DC)
t = 0: 1.5 (USD/GBP) –> 1 GBP = 1.5 USD
t = 1: 1.1 (USD/GBP) –> 1 GBP = 1.1 USD
Now, convert that in terms of domestic exchange rate (DC/FC):
t = 0: 0.67 (GBP/USD) –> 1 USD = 0.67 GBP
t = 1: 0.91 (GBP/USD) –> 1 USD = 0.91 GBP
Doesn’t this show with a depreciation in the foreign currency actually causes imports to rise, not exports (which is Wiley’s answer)?
1 USD is capable of buying MORE foreign currency, which leads to an increase in imports & decrease in aggregate demand.
I would really appreciate if someone could clarify. Thank you!

 

[archived_user]

You’re in Italy, and the British Pound/Euro exchange rate is GBP/EUR 0.8902; i.e., it takes GBP0.8902 to buy EUR1.0.
Suppose that this drops to GBP/EUR 0.4451. Ferrari sales to Great Britain will skyrocket (they’re now half-price (in GBP)), and Aston Martin sales to Italy will plummet (their price in EUR has doubled).
That’s about it.

 

[archived_user]

Sigh. Brain melted. Idk what I was thinking. Thank you for the explanation.

 

[archived_user]

My pleasure.