If USexport Contracts Are Written in Terms of Foreign Currency and and Import

question 24

Multiple Choice

If U.S.export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency,a devaluation of the dollar during the currency contract period

• A)should increase the dollar value of exports.
• B)should not have any effect on the dollar value of U.S. imports.
• C)must increase the BOT.
• D)All of the above

---

Definitions:

Identical Product

A product that is exactly the same in every feature, quality, and production process with another product, making them interchangeable.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies while the other players keep theirs unchanged, indicating an optimal state of balance.

Jointly Maximize Profits

A strategy where multiple parties or firms collaborate to enhance their collective profitability.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping to the right.