When the Real Exchange Rate for the Dollar Depreciates,U

question 11

Multiple Choice

When the real exchange rate for the dollar depreciates,U.S.goods become

• A)less expensive relative to foreign goods,which makes exports rise and imports fall.
• B)less expensive relative to foreign goods,which makes exports fall and imports rise.
• C)more expensive relative to foreign goods,which makes exports rise and imports fall.
• D)more expensive relative to foreign goods,which makes exports fall and imports rise.

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Definitions:

Cash Bidding Price

The price offered in cash during an auction or bidding process for an asset or item.

Market Price

The market price at which you can currently buy or sell an asset or service.

Interest Tax Savings

The reduction in tax payments resulting from the deduction of interest payments on debt from taxable income.

Discount Rate

In DCF analysis, the rate used to calculate the present worth of future cash flows.