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If the French Demand for American Exports Rises at the Same

Question 28

Multiple Choice

If the French demand for American exports rises at the same time that U.S.productivity rises relative to French productivity,then,in the long run,


A) the euro should appreciate relative to the dollar.
B) the dollar should depreciate relative to the euro.
C) the dollar should appreciate relative to the euro.
D) it is not clear whether the euro should appreciate or depreciate relative to the dollar.

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