Mod 6.5: The Foreign Exchange Market and Net Exports

Appreciation of a country’s currency will result in which of the following?

• Exports increase

• Imports decrease

• Net exports decrease

• Net exports increase

• There is no change in imports or exports

When a country’s currency depreciates, it will cause which of the following?

• Exports increase

• Imports decrease

• Net exports increase

• AD increases

• All of these

Which of the following will cause a currency to depreciate?

• an increase in currency demand

• a decrease in currency supply

• an increase in currency supply

• an increase in the exchange rate

• an increase in net exports

Net exports will decrease as a result of which of the following (all else equal)?

• an increase in imports

• an increase in exports

• a decrease in imports

• currency depreciation

• a decrease in interest rates

Which of the following will cause an increase in aggregate demand?

• an increase in net exports

• currency appreciation

• lower real GDP

• a decrease in the price level

• lower employment