The next questions refer to the following.
The nation of North does 20% of its trade with East, 30% with West, and 50% with South. Suppose that, relative to a base year, North's currency appreciates 80% against East's currency, appreciates 40% against West's currency, and depreciates 10% against South's currency.
-Then on a trade-weighted basis,North's currency has effectively
A) appreciated by 23%
B) appreciated by 33%
C) appreciated by 110%
D) depreciated by 5%
E) depreciated by 13%

Question

Quizplus · Accepted Answer

The trade-weighted appreciation of North's currency is calculated as follows:(20% x 80%) + (30% x 40%) + (50% x -10%) = 16% + 12% - 5% = 23%

The Next Questions Refer to the Following