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A country has most of its external liabilities in own currency and most of its external assets in foreign currency. Suppose the country experiences an
A country has most of its external liabilities in own currency and most of its external assets in foreign currency. Suppose the country experiences an exchange rate appreciation against a basket of major currencies. What would happen to the external wealth of this country?
a) rises
b) stays the same
c) falls
d) cannot tell
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