Suppose Brazil Has a Fixed Exchange Rate, and It Faces

question 54

Multiple Choice

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

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

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Definitions:

CVP

An acronym for Customer Value Proposition, which is the value a company promises to deliver to its customers.

Features

Distinct attributes or capabilities of a product or service that are highlighted to differentiate it from competitors in the market.

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