Suppose that the United Kingdom devalues the pound. If both exports and imports

Question

Suppose that the United Kingdom devalues the pound. If both exports and imports are written in terms of pounds, then the United Kingdom balance of trade during a currency contract period.. (a) improves . (b) worsens . (c) is unaffected (d) falls for a while before increasing Consider the yen-dollar exchange market. Under a system of floating exchange rates, which of the following would cause an appreciation of the yen? (a) An increase in Japanese demand for US products (b) An increase in the US interest rate (c) An increase in the Japanese price level 1. (d) None of the above

Explanation / Answer

a. is unaffected It's Q#25 here: http://www.econ.umn.edu/~ina/ECON4401/Tests/Practice_Final_AK.pdf

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