Assume That the Exchange Rate Between the Dollar and the Euro

question 34

Multiple Choice

Assume that the exchange rate between the dollar and the euro is €0.6 = $1. Suppose the exchange rate changes to €0.50 = $1. Because of the change:

• A)Australian exports should increase and Australian imports should increase.
• B)Australian exports should decrease and Australian imports should increase.
• C)Australian exports should increase and Australian imports should decrease.
• D)Australian exports should decrease and Australian imports should decrease.

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