An Export Subsidy Will Cause the Relative Demand for _

question 6

Multiple Choice

An export subsidy will cause the relative demand for _ to and the relative supply for to .

• A)imports; decrease; imports; increase
• B)exports; decrease; exports; increase
• C)exports; increase; exports; decrease
• D)exports; increase; imports; decrease
• E)imports; increase; imports; decrease

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Definitions:

Exchange Rates

The equivalent worth of one currency in another during exchange.

Exchange Gain/Loss

The gain or loss resulting from the fluctuation in exchange rates affecting the value of transactions in foreign currencies.

Acquisition Differential

The difference between the purchase price of a company and the fair market value of its identifiable net assets.

Exchange Rates

The rate for transforming one currency into another.