How does the concept of derived demand relate to the value of the U.S. dollar?
What will be an ideal response?
The demand for U.S. dollars is a derived demand because the demand for U.S. dollars derives directly from demand for U.S. goods and services or for U.S. investment. Foreigners must sell their own currencies in order to buy U.S. dollars. The more that U.S. goods, services, and investments are demanded abroad, the more U.S. dollars are needed by foreigners to make the necessary payments. This increased demand for U.S. dollars pushes up the exchange value of the U.S. dollar relative to foreign currencies.
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Consider a BMW automobile plant. If the price of BMWs increase by 10 percent and the money wage rate and other costs ________, there will be ________
A) increase by 10 percent; an increase in BMWs profits B) do not change; an increase in BMW's production and profit C) increase by 10 percent; an increase in BMWs production D) do not change; no change in production
Refer to the payoff matrix below. The Set High Price/Set High Price outcome is the ________.
A) Nash Equilibrium
B) cooperative equilibrium
C) pure -strategy Nash Equilibrium
D) dominant strategy equilibrium
The ATC curve for a firm that produces an information product
A. slopes downward, because AVC is constant, AFC slopes downward, and ATC = AVC + AFC. B. slopes upward, because AFC is constant, AVC slopes upward, and ATC = AFC + AVC. C. slopes downward, because MC slopes downward, AVC is constant, and ATC = AVC +MC. D. is U-shaped, because AVC is U-shaped, AFC slopes downward, and ATC = AVC + AFC.
Refer to Scenario 19.2 below to answer the question(s) that follow.SCENARIO 19.2: An individual earning $40,000 pays $3,200 in taxes. The marginal tax rate on any income earned above $40,000 is 20%.Refer to Scenario 19.2. When this person earns $40,000, her average tax rate is
A. 8%. B. 12.5%. C. 20%. D. indeterminate from this information.