For This Question, Assume That All Price Levels Are Fixed

question 60

Multiple Choice

For this question, assume that all price levels are fixed. Now suppose that there is a real exchange rate depreciation. This real depreciation will cause which of the following to occur?

• A) A decrease in net exports.
• B) A decrease in exports.
• C) An increase in net exports.
• D) An increase in imports.
• E) A decrease in demand for domestic output.

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Definitions:

Sugar Act

A law passed by the British Parliament in 1764, lowering the duty on imported molasses, aiming to strengthen the collection of trade duties under the Navigation Acts.

Raise Revenue

The process by which governments generate funds, typically through taxes, fees, or levies, to finance public services and projects.

Regulate Trade

The activity of controlling or governing trade between states or countries through laws and regulations to ensure fairness, efficiency, and safety.

Sugar Acts

Legislation passed by the British Parliament in the mid-18th century aimed at regulating the trade of sugar and molasses in the colonies.