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:

Stability

The state of being steady and unchanged, often referring to emotional or mental equilibrium.

Undercontrolled Temperament

A personality trait characterized by impulsiveness, lack of discipline, and difficulty in delaying gratification.

Anxious

Feeling anxious, troubled, or apprehensive, often in anticipation of an upcoming event or due to the unpredictability of its result.

Depressed

A state of low mood and aversion to activity affecting one's thoughts, behavior, feelings, and sense of well-being.