How Does an Increase in a Country's Exchange Rate Affect

question 83

Multiple Choice

How does an increase in a country's exchange rate affect its balance of trade?

• A)An increase in the exchange rate raises imports, reduces exports, and reduces the balance of trade.
• B)An increase in the exchange rate reduces imports, raises exports, and reduces the balance of trade.
• C)An increase in the exchange rate reduces imports, raises exports, and increases the balance of trade.
• D)An increase in the exchange rate raises imports, reduces exports, and increases the balance of trade.
• E)A country's exchange rate has no affect on its balance of trade.

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Definitions:

Market Approach

A method used to value a business or asset based on the price at which similar companies or assets have been sold.

Directly Related

A term describing entities or factors that are connected in a straightforward and immediate way, influencing each other's behavior or outcomes.

Firm Bidding

A procurement and contracting method where bidders submit fixed price proposals that cannot be altered after submission.

Best-And-Final-Offers

Best-and-final offers are the last and most competitive bids or proposals requested from suppliers or contractors during a negotiation, after which a selection is made.