Post Utme Caleb University 2020 Economics Question 21

Practice objective / multiple choice question 21 from the 2020 Post Utme Caleb University Economics examination.

Post Utme Caleb University 2020 Economics Objective / Multiple Choice

Question 21 POST_UTME_CALEB_UNIVERSITY • 2020 • ECONOMICS • objective

Consider a small open economy with a trade balance of -$100 million and a current account deficit of -$150 million. What is the likely effect on the exchange rate?

Answer Options

A. The exchange rate will appreciate.

Correct Answer B. The exchange rate will depreciate.

C. The exchange rate will remain unchanged.

D. The exchange rate will fluctuate.

Correct Answer

Correct Option:

The exchange rate will depreciate.

About This Question

This is Post Utme Caleb University 2020 Economics Question 21. It is one of the objective questions from the 2020 Post Utme Caleb University Economics examination.

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