Multiple Choice
How does a decrease in value of a country's currency relative to other currencies affect its balance of trade?
A) A decrease in value of a country's currency relative to other currencies raises imports, reduces exports, and reduces the balance of trade.
B) A decrease in value of a country's currency relative to other currencies reduces imports, raises exports, and reduces the balance of trade.
C) A decrease in value of a country's currency relative to other currencies reduces imports, raises exports, and increases the balance of trade.
D) A decrease in value of a country's currency relative to other currencies raises imports, reduces exports, and increases the balance of trade.
E) A decrease in value of a country's currency relative to other currencies reduces imports, reduces exports, and reduces the balance of trade.
Correct Answer:
Verified
Correct Answer:
Verified
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