Explain and show graphically how an increase in incomes in the United States will affect equilibrium in the foreign exchange market?
What will be an ideal response?
Higher incomes in the United States will increase demand for imports in the United States. The increased demand for imported goods will result in an increase in the supply of dollars (shift the supply curve to the right) as Americans trade in their dollars for the currencies of the countries from which they wish to purchase goods. The increase in supply results in a decrease in the equilibrium exchange rate (the dollar depreciates), and an increase in the equilibrium quantity of dollars traded.
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When a country's currency is devalued
A) output decreases. B) output increases and the money supply decreases. C) the money supply decreases. D) output decreases and the money supply increases. E) both the output and the money supply increases.
Which of the following is a fixed cost?
A. Electricity B. Worker bonuses C. Mortgage on the building D. Steel to produce refrigerators
An exception to weighting stocks by market cap is the Dow Jones Industrial Average, which uses the stock price relative to the sum of the prices of all the stocks in the index
a. True b. False Indicate whether the statement is true or false
Four firms are major manufacturers in different industries. Which firm is likely in an oligopolistic market?
a. Firm A finds that increasing its output raises its average total cost. b. Firm B competes against many rivals in its industry. c. Firm C earns zero long-run economic profit. d. Firm D is uncertain about its marginal revenue curve.