Explain how an increase in the American demand for German goods leads to a change in the German Mark relative to the U.S. dollar
Americans who wish to buy more German goods will need more German Marks. This increase in demand for Marks increases the price of Marks (relative to the dollar) on the foreign exchange market. The Mark has, therefore, appreciated relative to the dollar, and the dollar has depreciated relative to the Mark. A Mark will buy more dollars than before, and a dollar will buy fewer Marks..
You might also like to view...
GDP tends to underestimate the productive activity in the economy because it excludes the value of output from ________.
A. the consumption of fixed capital B. intermediate goods C. public transfer payments to households D. the underground economy
Which of the following statements is true of sharecropping?
a. It is an inefficient arrangement if the work of the farmer is not monitored. b. The higher the profit to the landowner, the higher the share of the farmer. c. Both the farmer and the landowner will work to maximize farm profits. d. The higher the profit to the landowner, the lower the share of the farmer.
Marginal cost of a product is the incremental cost of one additional unit of input.
A. True B. False C. Uncertain
Both Keynesian and monetarist theories emphasize the potential of aggregate demand shifts to alter macro outcomes.
Answer the following statement true (T) or false (F)