A shift of the U.S. demand curve for Mexican pesos to the left and a decrease in the peso price per dollar would result from
a. an increase in the U.S. inflation rate relative to the rate in Mexico.
b. a change in U.S. consumers' tastes away from Mexican products and toward products made in South Korea, India, and Taiwan.
c. U.S. buyers perceiving that domestically - produced products are of a lower quality than products made in Mexico.
d. all of the above answers are correct.
Answer: b. a change in U.S. consumers' tastes away from Mexican products and toward products made in South Korea, India, and Taiwan.
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Full employment describes the condition in which
a. 100 percent of the civilian labor force is employed. b. 95 to 96 percent of the civilian labor force is employed. c. there is no frictional unemployment. d. unemployment is 10 percent or less.
A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is know as a(n)
A) international dumping policy. B) countervailing tariff policy. C) beggar thy neighbor policy. D) trade adjustment assistance policy. E) redistribution quota policy.
Related to the Economics in Practice on page 83: Which of the following best explains why the people who wait for hours to acquire tickets to free performances earn less on average than the people who actually see those performances?
A. People interested in live performances are likely to have access to other forms of entertainment, such as television and radio. B. High-wage individuals are more likely to have schedule conflicts that prevent them from using their tickets. C. The value of time spent waiting in line is less for people who earn less money. D. People who earn more money are less likely to be aware of the opportunity to acquire free tickets.
Employing a fixed-weight index like the Consumer Price Index to adjust a person's salary in response to inflation will overcompensate this person because doing so will allow this person to
A) buy the same bundle of goods as he did before the inflation. B) achieve a higher level of utility than he did before the inflation. C) achieve the same level of utility as before the inflation. D) buy more of all goods.