If the demand for the goods that we export increases______? Group of answer choices 1The exchange rate is unaffected. 2The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates). 3The exchange rate increases (the US $ appreciates). 4The exchange rate decreases (the US $ depreciates).
If the demand for the goods that we export increases______? Group of answer choices 1The exchange rate is unaffected. 2The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates). 3The exchange rate increases (the US $ appreciates). 4The exchange rate decreases (the US $ depreciates).
Chapter18: International Finance
Section: Chapter Questions
Problem 2.3P
Related questions
Question
If the
Group of answer choices
1The exchange rate is unaffected.
2The exchange rate could decrease (the US $
3The exchange rate increases (the US $ appreciates).
4The exchange rate decreases (the US $ depreciates).
Expert Solution
Step 1
If the demand for the goods that export increases, the exchange rate increases and leads to an appreciation.
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