Which One of the Following Statements Is the MOST Accurate

question 26

Multiple Choice

Which one of the following statements is the MOST accurate?

• A) An increase in the real exchange rate and an increase in disposable income improve the current account.
• B) A decrease in the real exchange rate and a decrease in disposable income improve the current account.
• C) A decrease in the real exchange rate and an increase in disposable income improve the current account.
• D) An increase in the real exchange rate and a decrease in disposable income improve the current account.
• E) An increase in the real exchange rate and a decrease in disposable income lowers the current account.

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Definitions:

Short-Term

Relating to or occurring on a brief or immediate timescale, typically within one year.

Short-Term Collateralized

Financial arrangements that involve the use of assets as collateral for a short-duration loan.

Repurchase Agreement

A short-term borrowing agreement where one party sells securities and agrees to repurchase them at a higher price at a later date.

Municipal Bond

A bond issued by local or state governments to finance public projects, often offering tax-exempt interest payments.