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

question 85

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.

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Definitions:

Merchandise Inventory

Goods available for sale to customers, categorized as a current asset on a company's balance sheet.

Invoice Cost

The price of goods or services listed on an invoice, typically inclusive of fees and charges before any discounts.

Incidental Costs

Incidental costs refer to minor or secondary expenses that are not planned for but occur in the course of conducting business.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced items are recorded as sold first.