How Will the Exchange Rate (Foreign Currency Per Dollar)respond to an Increase

question 53

Multiple Choice

How will the exchange rate (foreign currency per dollar) respond to an increase in the relative rate of productivity growth in the United States in the long run?

• A)Exchange rates will rise.
• B)Exchange rates will fall.
• C)Exchange rates will be unaffected by changes in the relative rate of productivity growth in the United States,both in the short run and in the long run.
• D)The exchange rate will be affected in the short run,but not in the long run.

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Definitions:

Cerebrum

The largest brain structure, consisting of the upper part of the brain; divided into two hemispheres, it is in charge of most sensory, motor, and cognitive processes. From the Latin for “brain.”

Cerebellum

A part of the brain located at the back of the skull, responsible for coordinating voluntary movements and maintaining balance and posture.

Balance

The ability to maintain stability and equilibrium, either physically or in terms of a situation or approach.

Ballerina

A female ballet dancer, often highly trained and skilled in classical ballet techniques.