Suppose the Exchange Rate Between the U

question 153

Multiple Choice

Suppose the exchange rate between the U.S.and Argentina is initially set at 20 pesos per dollar and increases to 25 pesos per dollar.In the U.S.economy this would be expected to

• A)increase exports and decrease imports.
• B)increase both exports imports.
• C)decrease both exports imports.
• D)increase imports but have an unpredictable effect on exports.
• E)increase imports and decrease exports.