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Scenario: Exchange Rates
The value of a euro goes from US$1.25 to US$1.50.
-(Scenario: Exchange Rates) Look at the scenario Exchange Rates. In Germany, exports will _____ and imports will _____.

Question

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As the euro appreciates from US$1.25 to US$1.50, German goods become more expensive for foreign buyers, leading to a decrease in exports. Conversely, imports become cheaper for Germans, leading to an increase in imports.

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