The Effects of a Decrease in Export Demand

question 63

Multiple Choice

The effects of a decrease in export demand

• A) is a powerful argument in favor of fixed rates.
• B) is a powerful argument in favor of flexible rates.
• C) shows the difficulties in determining which exchange rate is better.
• D) is a powerful argument in favor of fixed rates only in the short run.
• E) is a powerful argument in favor of fixed rates only in the long run.

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Definitions:

Stock Prices

The current market price at which shares of a company are bought or sold.

Supply Shock

An unexpected event that suddenly changes the supply of a product or commodity, leading to a rapid change in its price.

Corporate Earnings

The profit a company makes after deducting the costs of doing business, such as expenses, taxes, and more, usually reported quarterly.

Stock Prices

The current price at which a share of a company is bought or sold in the market.