The Currency of Venadia,a Country,falls Sharply in Value Against the Currency

question 32

Multiple Choice

The currency of Venadia,a country,falls sharply in value against the currency of Lutetia,a neighboring country.Which of the following is a consequence of this exchange rate movement?

• A) Lutetia's products will achieve a competitive pricing in Venadia.
• B) Venadia's exports to Lutetia will increase because Venadian goods will become cheaper in Lutetia.
• C) Venadia's products will cost more in Lutetia.
• D) There will be no difference in the volume or direction of trade.
• E) Lutetia's exports to Venadia will increase because Lutetian goods will become cheaper in Venadia.