If the Dollar Falls by 20% Against the Euro and Rises

question 143

Multiple Choice

If the dollar falls by 20% against the euro and rises by 10% against the yen, which of the following values for European and Japanese trade with the United States are consistent with a 10% increase in the effective exchange rate of the United States?

• A) Europe: 33%; Japan: 66%
• B) Europe: 66%; Japan: 33%
• C) Europe: 50%; Japan: 50%
• D) None of these values is consistent with this increase.

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