Which One of the Following Statements Is the MOST Accurate

question 26

Multiple Choice

Which one of the following statements is the MOST accurate?

• A) An increase in the real exchange rate and an increase in disposable income improve the current account.
• B) A decrease in the real exchange rate and a decrease in disposable income improve the current account.
• C) A decrease in the real exchange rate and an increase in disposable income improve the current account.
• D) An increase in the real exchange rate and a decrease in disposable income improve the current account.
• E) An increase in the real exchange rate and a decrease in disposable income lowers the current account.

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Definitions:

Net Present Value

A calculation used to determine the value of an investment by estimating future cash flows and discounting them to their present value.

Flotation Costs

Expenses incurred by a company when it issues new securities, including underwriting fees, legal fees, and registration fees.

Debt

Debt is an amount of money borrowed by one party from another, to be repaid usually with interest.