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Under Flexible Exchange Rates, If the Domestic Currency Depreciates, Net

Question 1

Multiple Choice

Under flexible exchange rates, if the domestic currency depreciates, net exports will most likely


A) increase in both the short run and the long run
B) decrease in both the short run and the long run
C) increase in the short run but decrease in the long run
D) decrease in the short run but increase in the long run
E) increase in the short run, but remain unchanged in the long run

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