If the Exchange Rate Is Defined as the Price of the Foreign

question 70

Multiple Choice

If the exchange rate is defined as the price of the foreign currency in terms of the domestic currency, an increase in the exchange rate:

• A)increases domestic demand for foreign goods.
• B)makes domestic goods cheaper in the foreign markets.
• C)lowers net exports.
• D)lowers aggregate expenditure on domestic goods.
• E)increases the domestic country's external debt burden.

---

Definitions:

Abstract Principles

Fundamental concepts or ideas that are not tied to any specific instances or material objects, often serving as the basis for reasoning or action.

Lower Classes

A segment of society with lower economic and social status, often associated with lower income and limited access to resources.

Mainstream

Representing prevalent attitudes, values, and practices of the majority within a society or group.

Religious Organizations

Groups or institutions formed around shared beliefs and practices concerning the sacred or divine.