Which of the Following Would Cause the Real Exchange Rate

question 12

Multiple Choice

Which of the following would cause the real exchange rate of the U.S.dollar to appreciate?

• A)the U.S.government budget deficit decreases
• B)capital flight from the U.S.
• C)the U.S.imposes import quotas
• D)None of the above is correct.

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Definitions:

Compounded Annually

A method of calculating interest in which the accumulated interest is added to the principal at the end of each year, resulting in interest on interest in successive years.

Compounded Annually

Interest on a loan or mortgage calculated on an annual basis, where interest from previous periods also earns interest in subsequent periods.

Financial Emergency

A situation where an individual or organization experiences a sudden and severe lack of funds, necessitating immediate action.

Annual Rate Of Growth

The percentage increase in the size or value of something over a one-year period.