Which situation would allow a country to increase the value of its imports without increasing the amount of money it spent in trade?
A. The value of the country's currency increases relative to other countries.
B. The value of the country's currency decreases relative to other countries.
C. The country changes its trade policy to create a fixed exchange rate.
D. The country changes its trade policy to create a flexible exchange rate.
Answer (2)
The correct option for increasing imports without increasing spending is A: the value of the country's currency increases relative to other countries. This appreciation enables the country to buy more goods for the same amount of money. A stronger currency enhances purchasing power, allowing for higher value imports without additional expenditure.
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A country can increase the value of its imports without increasing spending if its currency strengthens relative to other currencies. This appreciation allows the country to purchase more goods for the same amount of money. Thus, option A is the correct choice. ;
