How are consumers, firms, and investors affected when the U.S. dollar is “weak?” Who benefits and who is harmed?
What will be an ideal response?
When the dollar is “weak,” this means that a dollar will buy relatively few units of foreign currencies. At the same time, foreign currencies are relatively “strong” compared to the U.S. dollar. This makes U.S. exports of goods and services relatively cheaper for foreigners to buy, which benefits U.S. firms that export abroad and U.S. tourist attractions that cater to foreign visitors. A weak dollar also makes it easier for foreign investors to invest in the United States. However, a weak dollar makes foreign imports relatively more expensive to U.S. consumers. For example, U.S. tourists find relatively higher prices when traveling abroad. A weak dollar also makes it more difficult for U.S. investors to invest in foreign assets.
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A diagram that shows the maximum amount of one type of good that can be produced in an economy, given the production of the other is known as
A) an indifference curve. B) the tradeoff schedule. C) the production possibility frontier. D) the balance of trade.
D. All of these statements are true.
A. an output gap. B. a recession. C. a boom. D. an inflationary gap. AACSB: Reflective Thinking
An example of an external cost of alcohol is
A. traffic fatalities attributable to drunk driving. B. the cost of producing whiskey. C. the cost to alcoholics of going to rehabilitation clinics. D. the cost to bars of hiring janitors to clean up after their customers.
Explain: “Whenever a number which is less than the previous average of a total is added to that total, the average will necessarily fall. Conversely, whenever a number which is greater than the previous average of a total is added to that total, the
average will necessarily rise.” How does this help explain the relationship between the various short-run cost curves? Between the various productivity curves? Please provide the best answer for the statement.