Which of the Following Would Cause the Current Account to Decrease

question 8

Multiple Choice

Which of the following would cause the current account to decrease?

• A) an increase in the nominal exchange rate, E
• B) an appreciation of the home currency
• C) an increase in disposable income
• D) an increase in foreign prices, P*
• E) a decrease in domestic prices, P

---

Definitions:

In-Groups

Social groups to which an individual feels a sense of belonging and loyalty, often distinguished by shared interests, values, or characteristics.

Out-Groups

Groups to which an individual does not belong or identify with, often viewed with bias or suspicion by the members of an in-group.

LMX Theory

Leader-Member Exchange Theory; a concept that suggests the type of relationship leaders form with each member of their team can impact the team's success.

Transactional Leadership

A style of leadership focused on supervision, organization, and performance, where leaders promote compliance through rewards and punishments.