Trade Balance: An Appreciation of the Exchange Rate
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The aim of these questions is to look at the consequences of an appreciation of the exchange rate on the trade balance.
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Given the following settings, what happens to the trade balance if there is a 10% appreciation of the currency?; 
- PED of Imports = -0.4
- PED of Exports = -0.7
- Quantity of Imports = 14
- Quantity of Exports = 8
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