The main reason(s) why governrnents sometimes chose to devalue their currencies is (are) a. devaluation allows the government to fight domestic unemployment by stimulating export sector. b. devaluation improves the current account balance. c. devaluation preserves foreign reserves held by the central bank. d. All of the above. 1 When the exchange rate Exs was 100, a U.S. firm imports one Toyota automobile at 1,000,000 and agrees to make payments 60 days from the day of contract signing. On day 45, the exchange rate value changes to Evs-80, what would happen to the U.S. import value from this exchange rate change? a. If the contract is written in dollar, the import value decreases. b. If the contract is written in dollar, the import value increases. c. If the contract is written in yen, the import value decreases. d. If the contract is written in yen, the import value increases. 2. ccording to the absorption approach, if the domestic income is greater than the domestic absorption, then: a. A country is experiencing trade surplus. b. A country is experiencing trade deficit. c. A country is experiencing balanced trade d. A country is always at its full-employment level of production is devalued. If an import contract is written in a foreign currency, then the value of U.S Suppose the dollar imports a. Decrease b. Increase c. Stay the same d. Not possible to answer with the given information 4. s. Suppose the dollar is devalued. If an export contract is written in a foreign currency, then the value of u.s. exports a. Decrease b. Increase c. Stay the same d. Not possible to answer with the given information 6. If the domestic currency is devalued and both export and import contracts are written in the domestic currency, then the trade balance will: a. Increase b. Decrease c. Stay the same d. Uncertain