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andrezito [222]
3 years ago
8

In an open economy, why is the demand curve for dollars in the foreign-currency exchange market downward sloping? A. A depreciat

ion in the domestic currency causes exports to fall and imports to rise and, therefore, net exports to fall. B. A depreciation of the dollar reduces the quantity of dollars demanded in the market for foreign-currency exchange. C. When the value of the domestic currency depreciates, domestic goods become less expensive relative to foreign goods, making domestic goods more attractive to domestic and foreign consumers. D. Net capital outflow equals net exports.
Business
1 answer:
o-na [289]3 years ago
8 0

Answer:

C. When the value of the domestic currency depreciates, domestic goods become less expensive relative to foreign goods, making domestic goods more attractive to domestic and foreign consumers.

Explanation:

The demand curve for foreign currency is downward sloping because a higher exchange rate makes domestic goods more expensive and viceversa.

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Answer:

D. Absolute Advantage

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The absolute advantage for Russia in the question is that it has the only deposits of Yuksporite and using the same amount of labour input other countries would have used, Russia has the absolute advantage as the only manufacturer of goods that would come out of Yuksporite.

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