When a Country's Currency Undergoes a Real Appreciation

question 103

Multiple Choice

When a country's currency undergoes a real appreciation:

• A)exports fall and imports rise.
• B)exports rise and imports fall.
• C)the merchandise trade balance becomes positive.
• D)exports and imports do not change.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points around their mean, commonly used in finance to assess the risk or volatility of an investment.

Risky Asset

An asset that has a significant degree of risk associated with it, offering the potential for higher returns in exchange for the increased risk.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean and is used in finance to gauge the amount of historical volatility of an investment.

Risk-Free Asset

An investment that is expected to return its principal and interest with near certainty, such as government bonds from stable countries.