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The Trajectory of the Weighted Exchange Rate of the U

Question 2

Multiple Choice

The trajectory of the weighted exchange rate of the U.S. dollar shows


A) a dramatic reduction beginning in 1980 finally bottoming out in late 1985 so that one-half of the decline was recovered by 1986.
B) a small reduction beginning in 1980 followed by a precipitous decline starting in 1985 and continuing through at least 1987.
C) a dramatic increase beginning in 1980 finally peaking in late 1985 so that nearly one-half of the gain had eroded by 1986.
D) a small increase beginning in 1980 followed by a sharp increase starting in 1985 and continuing through at least 1987.
E) a stable international valuation through 1985 when a sudden downturn eroded 50 percent of the value of the dollar in just one year.

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