Which of the Following Would Decrease the Real Exchange Rate

question 51

Multiple Choice

Which of the following would decrease the real exchange rate in a small open economy?

• A)a personal income tax cut
• B)a reduction in government spending
• C)a tariff on imports
• D)an increase in investment

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Definitions:

Magma

Molten rock located beneath the earth's surface, which can erupt as lava during a volcanic eruption and solidify to form igneous rocks.

Heat

A form of energy associated with the movement of atoms and molecules in substances.

Deformation

Processes that cause a rock body to change position, orientation, size, or shape, such as by folding, faulting, and shearing.

Metamorphic Rocks

Rocks that have been transformed from an original state into a new texture or structure by heat, pressure, and/or fluid activity.