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    Question

    When exchange rate in terms of domestic currency rises

    A Exports become cheaper Correct Answer Incorrect Answer
    B Exports become costlier Correct Answer Incorrect Answer
    C Imports become cheaper Correct Answer Incorrect Answer
    D No effect on imports Correct Answer Incorrect Answer
    E No effect on exports Correct Answer Incorrect Answer

    Solution

    When exchange rate in terms of domestic currency rises exports become cheaper.

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