How Does an Increase in the Relative Price of a Country's

question 55

Multiple Choice

How does an increase in the relative price of a country's goods in terms of foreign goods,or real exchange rate,affect its balance of trade?

• A)An increase in the real exchange rate raises imports,reduces exports,and reduces the balance of trade.
• B)An increase in the real exchange rate reduces imports,raises exports,and reduces the balance of trade.
• C)An increase in the real exchange rate reduces imports,raises exports,and increases the balance of trade.
• D)An increase in the real exchange rate raises imports,reduces exports,and increases the balance of trade.

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Definitions:

Ventral Surface

refers to the front or anterior surface of any body part or organ.

Olfactory Bulbs

Structures located in the forebrain involved in the sense of smell, receiving sensory input from the olfactory nerves.

Anterior

Situated at the front or towards the front of the body.

Meninges

Protective membranes that cover the brain and spinal cord, consisting of three layers: the dura mater, arachnoid mater, and pia mater.