Suppose Two Countries, a and B, Are Trading with Each

question 73

Multiple Choice

Suppose two countries, A and B, are trading with each other. Suppose also that the rate of inflation in B is higher than in A. There will be

• A)an increase in Country B's exports.
• B)no effect on the foreign- exchange market.
• C)an increase in the supply of Country B's currency in the foreign- exchange market.
• D)an increase in the demand for Country B's currency in the foreign- exchange market.
• E)a decrease in Country B's imports.

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Definitions:

Healthy Sense Of Skepticism

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The act of providing evidence or reasoning that challenges or refutes a particular assertion or belief.

Consistent With The Facts

A statement or claim that aligns with established evidence or reality, lacking contradictions.

Necessarily True

A statement or proposition that cannot be false under any circumstances.