Suppose the Exchange Rate Is Initially Set at 120 Yen

question 196

Multiple Choice

Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar. In the U.S. economy this would be expected to

• A)increase the U.S.trade deficit (or decrease the trade surplus).
• B)decrease the U.S.trade deficit (or increase the trade surplus).
• C)increase the U.S.trade deficit only if exports change by more than imports.
• D)leave the U.S.trade deficit unchanged.
• E)decrease the U.S.trade deficit only if exports change by more than imports.

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Definitions:

Multiple Structures

The existence or application of various organizational models or frameworks within a single company or system.

Decentralized

The distribution of authority, decision-making, or resources away from a central location or governing body, allowing for more local or individual control.

Highly

Describes something of great importance, to a great degree, or with intense quality.

Rules

Guidelines or principles that govern conduct within a particular context or system.