Suppose the United States Has a Fixed Exchange Rate, and It

question 24

Multiple Choice

Suppose the United States has a fixed exchange rate, and it faces domestic inflation and a trade surplus.Assuming it desires overall balance, if the United States revalues the dollar, other things equal one would expect which of the following to occur?

• A) inflation to become more severe and the trade surplus to become less severe
• B) inflation to become less severe and the trade surplus to become less severe
• C) inflation to become less severe and the trade surplus to become more severe
• D) inflation to become more severe and the trade surplus to become more severe

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Definitions:

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A framework for categorizing individuals into distinct personality types based on certain patterns of behavior, thoughts, and emotional responses.

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abilities related to communicating effectively using language and interacting positively with others.

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Relating to commonly accepted standards, norms, or practices.