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:

Binding Decision

A decision or ruling that must be followed or adhered to by the parties involved.

Distributive Bargaining

A negotiation method focusing on dividing a fixed amount of resources, often resulting in a win-lose scenario for the parties involved.

Long-Term Relationships

Connections or associations between individuals or entities that are intended to last for an extended period, often characterized by mutual trust and support.

BATNA

The best possible alternative to a negotiable agreement.