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During the middle years of last decade, the exchange rate of the U.S. dollar has declined against the currencies of its major trading partners. You would expect this to result in a corresponding increase in U.S. dollar denominated import prices from those trading partners. U.S. dollar import prices, however, often rise less than the increase in the currency value of the exporter. Why? Explain with examples.
This document contains various important questions and their appropriate answers in the subject field of Economics.
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