If the value of the euro falls from $1.45 to $1.42, how would this change be described?
a) The euro depreciated against the dollar.
b) The euro appreciated against the dollar.
c) The dollar depreciated against the euro.
d) The purchasing power parity between the two currencies increased.
Answer: a) The euro depreciated against the dollar.
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The crowding-out effect indicates that budget deficits
a. will stimulate aggregate demand and, therefore, exert a strong impact on output and employment. b. will lead to additional borrowing and higher interest rates that will reduce the level of private spending. c. are highly appropriate when the threat of inflation is present. d. are highly appropriate when the threat of recession is present.
An important law in the U.S. regulation of markets is the:
A. Sherman Antitrust Act of 1890. B. Lincoln Antitrust Act of 1890. C. Standard Oil Antitrust Act of 1890. D. Alcoa Antitrust Act of 1890.
Positive externalities occur when an economic activity has a spillover ______ that ______ affect those directly engaged in the activity.
Fill in the blank(s) with the appropriate word(s).
If monopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models?
A. The kinked demand curve model of oligopoly B. The price-leadership model of oligopoly C. The pure monopoly model D. The monopolistic competition model