Assuming a Fixed Exchange Rate, a Decrease in U

question 7

Multiple Choice

Assuming a fixed exchange rate, a decrease in U.S.prices relative to European prices will:

• A)decrease European exports to the United States.
• B)increase U.S.imports from Europe.
• C)decrease aggregate spending in the U.S.
• D)not affect U.S.exports or imports.
• E)raise the purchasing power of U.S.consumers.

---

Definitions:

Wax Crystals

Solid crystalline substances formed in some oils and fats that can cause blockages in fuel systems or cloud the appearance of liquids at lower temperatures.

Plug Filters

Devices used to remove particulate contaminants from fluids or gas streams, often installed in-line with other machinery or systems.

Differential Carrier Housing

The casing that encloses the differential assembly in a vehicle, providing protection and support for the differential gears.