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Under a Fixed Exchange Rate System,a Currency Devaluation Will ________

question 38

Multiple Choice

Under a fixed exchange rate system,a currency devaluation will ________ the nominal exchange rate and will ________ net exports.


Definitions:

Comparative Advantage

The competence of an individual, firm, or nation to forge a good or render a service with a lower forfeited opportunity compared to others in the market.

Productivity

A measure of the efficiency of production, usually defined as the ratio of outputs produced to inputs used.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision or choosing one option over another.

Opportunity Cost

The financial consequence of rejecting the subsequent optimal choice when deciding.

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