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A Large Increase in the Income Level in the Euro

Question 9

Multiple Choice

A large increase in the income level in the euro area along with no growth in the UK income level is normally expected to cause (assuming no change in interest rates or other factors) a(n) ____ in European demand for UK goods, and the euro should ____.


A) increase; appreciate
B) increase; depreciate
C) decrease; depreciate
D) decrease; appreciate

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