If the dollar depreciates relative to other currencies, which of the following is true?
a. It takes more foreign currency to buy a dollar.
b. It takes more dollars to buy a foreign currency.
c. U.S. exports will decrease.
d. Foreign purchases of U.S. goods will decrease.
b
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The world price of a good refers to the quantity of one good exchanged for a unit of another good.
Answer the following statement(s) true (T) or false (F)
Refer to the figure above. If the government of China wants to keep the exchange rate below E yuan per dollar:
A) it will have to buy dollar and sell yuan. B) it will have to buy yuan and sell dollars. C) it will have to buy both dollars and yuan. D) it will have to sell both dollars and yuan.
Taxes cause:
a. Market distortions b. Reduce incentives to work c. Decrease wealth creating transactions d. All of the above
The most important implicit cost generally omitted from the accounting statement of a firm is the
a. rental cost of machinery. b. cost of compliance with government regulations. c. opportunity cost of the equity capital invested by the owners. d. accounting cost incurred as the result of tax compliance.