The exchange rate changed from € 2.5/ $ to € 2.0/ $. Therefore:
a. The euro appreciated by 25% and the dollar depreciated by 20%.
b. The euro appreciated by 25% and the dollar depreciated by 25%.
c. The euro depreciated by 25% and the dollar appreciated by 25%.
d. The euro appreciated by 20% and the dollar depreciated by 25%.
e. The euro depreciated by 20% and the dollar appreciated by 20%.
.A
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Refer to Figure 12-20. If the market price is P1, what is the allocatively efficient output level?
A) Q0 B) Q1 C) Q2 D) There is no allocatively efficient output level because the firm is making a loss.
In the foreign exchange market, a balance of payments deficit is represented by:
A) excess supply of dollars. B) excess demand for dollars. C) equilibrium in the foreign exchange market. D) none of the above.
What causes an economy to produce a level of output which lies inside the production set?
Taxes are the only mechanism by which the federal government earns money.
Answer the following statement true (T) or false (F)