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Suppose a country A engages in international trade with country B. Suppose further there is a fall in the free-market exchange rate of the domestic
Suppose a country A engages in international trade with country B. Suppose further there is a fall in the free-market exchange rate of the domestic currency of country A. a) what is likely to happen to country A' s volume of import and why? b) What is likely to happen to country A' s volume of export, and why? c) What is likely to happen to the competitiveness of country A' s import-competing industries and why? d) What do you predict will happen to the general price level of country A, and why
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