How Does an Increase in a Country's Exchange Rate Affect

question 85

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.

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Definitions:

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A switch operated by an electromagnet to open or close one or many sets of contacts, used in control systems.

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The branch of physics concerned with the interaction of electric currents or fields and magnetic fields.

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Disturbances generated by external sources that affect an electrical circuit by electromagnetic induction, electrostatic coupling, or conduction.