Suppose There Are Only Two Countries in the World,countries a and B.If

question 64

Multiple Choice

Suppose there are only two countries in the world,countries A and B.If the currency of country A appreciates,the currency of country B

• A)can appreciate relative to other countries.
• B)must appreciate.
• C)may appreciate or depreciate,depending on the elasticity of demand for the exports of country A.
• D)must depreciate.
• E)may appreciate or depreciate,depending on the volume of trade between the two countries.

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Definitions:

Demand

The volume of a commodity or service that buyers intend and can afford to buy across a range of prices over a set time frame.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, influencing consumer behavior and market dynamics.

Unity

The state of being united or joined as a whole, often used to denote a sense of togetherness or harmony.

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.